Higher Income Consumers Increase Spending on Beauty Products by 14% in 2022: NPD Group

Higher income consumers in the US with annual household incomes of over $100,000 spent nearly $9 billion on beauty products in the first half of 2022. Beauty sales to these consumers increased by 14%, year over year, according to The NPD Group. This double-digit growth was spurred by a combination of more buyers in the market and consumers spending more compared to last year, with Generation X and Millennials leading the charge.

Illustrating their spending power in the beauty market, higher income US households account for more than 40% of beauty sales revenue, according to NPD Checkout Omnichannel Tracking, which recently added beauty to the list of industries covered.  Capturing data from in-store and online receipts, Checkout provides an overarching view of beauty product buyers across prestige beauty and disruptive channels, such as direct-to-consumer (DTC), peer-to-peer and digital natives, according to NPD.

“During this critical time when retail recovery is forced to coexist with mounting economic pressures, it is imperative for beauty brands and retailers to understand which consumers are most engaged and willing to spend,” said Larrisa Jensen, beauty industry advisor at NPD. “These behaviors can vary by beauty category but getting it right and acting on it can provide the competitive advantage necessary to succeed.”

Elevated spending from higher income beauty consumers is tied to their above-average engagement with the industry’s two largest categories—makeup and skincare. While 74% of women use facial skincare products and 67% use makeup, those in higher income households significantly over-index in each category, with usage over 80%.

Furthermore, Generation X is an untapped opportunity in the skincare market, based on findings from the “Facial Skincare Consumer Report” from NPD. While facial skincare product usage from other generations declined, Generation X is the only cohort whose usage remained steady compared to last year. They use nearly as many products as Millennials — who use the most — and they are also more likely than any other generation to purchase products that carry higher price tags. In the makeup market, women in higher income households showed the most significant usage increase, rising by eight points since last year, according to the “Makeup Attitudes and Usage Report” from NPD.