The Beauty Sector is Poised for Growth, but Where Will You Shop? The beauty sector is expected to grow at a compound annual growth rate of about 5% between 2025 and 2030, according to a new report by TD Cowen.
| Total Addressable Market for Beauty in the U.S. | $115 billion |
| Amazon’s Market Share in Beauty (2024) | 10% |
| Amazon’s Market Share in Beauty (2030) | 15% |
| TikTok Shop’s Market Share (2024) | 1% |
| TikTok Shop’s Market Share (2030) | 3% |
Amazon and Walmart are expected to dominate the U.S. beauty market, with Amazon’s market share projected to reach 15% by 2030, up from 10% in 2024. •
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- Amazon will have 15% of the market by 2030, second only to Walmart.
- The combined share of Walmart and Target will slip to about 25% in 2030, down from 26% in 2024.
- TikTok Shop is expected to grow from 1% to 3% in that time.
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Walmart and Target will see their combined market share slip to about 25% in 2030, down from 26% in 2024. •
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- Sephora, Ulta, and Sally Beauty will dip from 20% in 2024 to 19% by 2030.
- The drug store market for beauty products is projected to decline from 5% to 3% in that time.
- Department stores will see their share fall from 7% to 5% in the same time period.
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The beauty space is resilient and growing, but where people shop for beauty products is changing. •
Demographics Matter
Consumers made the most beauty purchases at mass-market retailers within the past 30 days, followed by Amazon, Ulta, and drug stores, according to TD Cowen’s Consumer Tracker. Consumers aged 18 to 34 overindexed on beauty purchases at mass-market retailers, Amazon, Ulta, and Sephora compared to older groups. However, it’s shoppers aged 35 to 54 that drive 40% of beauty sales. •
Wellness Meets Beauty
Wellness, which overlaps with beauty in areas like sleep, intimate care, and nutrition, is being embraced by beauty retailers and mass merchants alike. Ulta, for example, expanded its product offerings to include more wellness items in 2023 through in-store wellness spaces titled “The Wellness Shop” at more than 1,330 stores across the U.S. •
“The stability of the beauty market is underappreciated and the next leg of growth will be driven by innovation, wellness, fragrance, hair care, and prestige,” TD Cowen analysts noted in the report.
The retailer refreshed the look of these spaces to give them “a new, elevated spa-like redesign” and help shoppers learn about new products. Similarly, Target is bringing more wellness merchandise into its stores. Earlier this year, the retailer introduced over 2,000 wellness-related products across categories like beauty, health, and nutrition. To highlight its new additions, the retailer will position some items at the front of its stores and feature other products at prominent displays throughout its aisles. At the same time, though, the retailer has hit pause on its Ulta shop-in-shop partnership as Ulta itself navigates a rough patch. •
Big Retailers Take Notice
Walmart added more than 20 premium beauty brands to its online marketplace and began promoting them via custom digital storefronts and editorial content. The retailer also integrated over 60 brands into its premium beauty assortment in the past year, including Curology, Being, and Pretty Smart. Amazon has also made significant moves in the beauty space, expanding its product offerings and investing in digital marketing to reach customers. The company’s focus on digital marketing has helped it build a strong presence in the market. In the beauty sector, the competition is heating up, but it’s not all about Amazon and Walmart. There are other players in the market that are worth noting, such as Sephora and Ulta, which are investing heavily in their online platforms and in-store experiences to stay competitive. •
Key Takeaways
The beauty sector is poised for growth, with a compound annual growth rate of about 5% between 2025 and 2030. Amazon and Walmart are expected to dominate the U.S. beauty market, but there are other players that are worth noting. Wellness and innovation are key drivers of growth in the sector, and retailers are taking notice. By understanding the changing preferences of consumers and investing in their online and in-store experiences, retailers can stay ahead of the competition and drive growth in the beauty sector.
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