CREATIVE PARTNER
Beauty Bucks the Squeeze
Beauty keeps outgrowing retail by sticking to fundamentals: accessible premium pricing, constant product drops, and showing up wherever shoppers want to buy. While other categories wait for the economy to turn, beauty's going strong.
For context: UK retail sales managed 3.1% YoY in August, with discretionary spending staying mixed. Beauty was one of the few categories showing consistent growth.
Ulta's Q2 FY25 delivered results that make other retailers envious:
Net sales: $2.79bn (+9.3%)
Acquiring Space NK (83 stores across UK/Ireland) in July for instant premium assortment and international reach.
Their flywheel works: New product cadence drives traffic. Loyalty programs create stickiness. In-store services add experiences.
26 consecutive quarters of growth isn't luck. It's execution.
Latest quarter:
They're managing tariff pressures with targeted price adjustments that protect share. Their "accessible premium" positioning pulls customers up from mass without triggering sticker shock.
That 30% international growth proves the model translates globally. Value-conscious premium works everywhere.
McKinsey's State of Beauty 2025 nails it: Consumers want value-proof, not hype.
That means:
Distribution flexibility matters. Online's heading toward 33% of sales by 2030, but success means being present across every channel where customers might impulse-buy a lip oil or research retinol.
Brands that nail all four stand the best chance of solid growth, despite the economy.
Home & Personal Tech: Swap annual launches for beauty's approach - smaller product development cycles, frequent drops and limited editions that keep customers engaged year-round.
Fashion: Beauty's proof-based selling translates. Show the dress on different body types. Demonstrate the jacket's weather resistance. Make quality visible.
Beauty outperforms because it delivers evidence at accessible prices and meets shoppers wherever they buy. While other sectors wait for conditions to improve, beauty executes basics exceptionally well. Accessible luxury that doesn't break budgets. Constant newness that drives urgency. Proof that converts browsers to buyers.
Ulta Shows How Scale Compounds
Ulta's Q2 FY25 delivered results that make other retailers envious:
Net sales: $2.79bn (+9.3%)
Acquiring Space NK (83 stores across UK/Ireland) in July for instant premium assortment and international reach.
Their flywheel works: New product cadence drives traffic. Loyalty programs create stickiness. In-store services add experiences.
e.l.f. Keeps Proving the Model
26 consecutive quarters of growth isn't luck. It's execution.
Latest quarter:
- $353.7m (+9%)
- International sales +30% YoY
- First quarter post-$1bn Rhode acquisition
They're managing tariff pressures with targeted price adjustments that protect share. Their "accessible premium" positioning pulls customers up from mass without triggering sticker shock.
That 30% international growth proves the model translates globally. Value-conscious premium works everywhere.
Why Beauty Works Now
McKinsey's State of Beauty 2025 nails it: Consumers want value-proof, not hype.
That means:
- Before/after evidence and clinical trials
- Products that visibly work, creating repeat purchases
- Omnichannel presence customers shop, stores, sites, social, marketplaces
Distribution flexibility matters. Online's heading toward 33% of sales by 2030, but success means being present across every channel where customers might impulse-buy a lip oil or research retinol.
The Beauty Playbook
- Accessible price-points with premium features (packaging, ingredients, storytelling)
- Fast launch cycles that maintain engagement year-round
- Proof-based selling (clinical results over celebrity endorsements)
- Channel flexibility (wholesale + DTC + marketplaces + creator collabs)
Brands that nail all four stand the best chance of solid growth, despite the economy.
Lessons for Other Categories
Home & Personal Tech: Swap annual launches for beauty's approach - smaller product development cycles, frequent drops and limited editions that keep customers engaged year-round.
Fashion: Beauty's proof-based selling translates. Show the dress on different body types. Demonstrate the jacket's weather resistance. Make quality visible.
The Bottom Line
Beauty outperforms because it delivers evidence at accessible prices and meets shoppers wherever they buy. While other sectors wait for conditions to improve, beauty executes basics exceptionally well. Accessible luxury that doesn't break budgets. Constant newness that drives urgency. Proof that converts browsers to buyers.
Are you a brand that cares?Do you want to communicate your
Let's TalkDo you want to communicate your
purpose even more effectively?
That's why we exist. To create a natural, authentic competitive
edge for the brands that care most in the world.
edge for the brands that care most in the world.
