04/20/2024: We’re kicking off a beauty initiative

I’m the last person who should be writing about beauty.

Ok, maybe not the very last person. I’ve definitely worn more makeup than your average Appalachian-bred male, thanks to a couple of high school musicals and a bunch of TV gigs. I even keep foundation and concealer in my briefcase because you never know.

But I’m certainly no expert.

Recently, I’ve had no choice but to learn more about it – the industry that is. Unless your eyelids were sealed shut by mascara, you’ve seen the astonishing run beauty companies have been on. Last year, it represented the fastest-growing U.S. retail category. Crazier still, prestige beauty outpaced the rest of the category, inflation be damned. e.l.f. Cosmetics was the highest-gaining stock on the NYSE over the past five years – more than Nvidia.

Ironically, from the early days of COVID – “Why would anyone need makeup when they never leave the house?” – to the economic headwinds that followed, conventional wisdom foretold of doom for the beauty industry. Conventional wisdom is stupid.

There are a lot of reasons why. Chief among them (as I once discussed with Ulta CEO Dave Kimbell on my podcast) is beauty’s shift from a “fashion” expression to a “wellness” expression. Women were hit disproportionately hard by the pandemic. They lost jobs and wages at a higher rate and bore the brunt of lockdown childcare and eldercare. Beauty and skincare products became a way to feel better, even if it meant curtailing spending on other things. As a result, the industry thrived. And I totally just mansplained all that.

Meanwhile, beauty consumers are bellwethers of some of the biggest cultural trends in America today. Take the explosion of women’s sports fans. No fewer than three beauty brands dropped $7M+ for Super Bowl ads this year, a first.

And no industry has capitalized more on the zeitgeist machine of TikTok. Trends and products spread like wildfire, as influencers post videos of skincare regimens and sing songs of loyalty to their favorite brands. The best beauty marketers have the system down pat.

All of that’s to tell you we’re kicking off a major beauty industry initiative this week. Since launching our advertising business, the attitudinal and emotional signals we harness have proven particularly effective at reaching and winning beauty buyers. Now, we’re blowing that out. We’re also unveiling a new monthly report, monitoring key trends and insights about this powerful and economically resilient group of consumers.

But you’ll have to pay for it.

The gallon of CeraVe my kids use every month isn’t cheap.

Here’s what we’re seeing:

People are tipping more – and more often. I’ll resist the urge to take credit for this after my rant about tipping the bellman a few weeks ago, but people seem to be slinging gratuities more than ever nowadays. In our 3 Things to Know this week, we found that 40% of Americans report tipping more today than they did a year ago, even as economic headwinds might explain otherwise (to be clear, 10% of people say they’re tipping less often). Among those increased tippers, nearly 1 in 5 say they regularly tip at 25% or more. We also highlighted how the convenience of mobile payments is driving increased consumer spending overall. And we looked at the state of public concern around climate change, which keeps falling – perhaps because younger consumers are optimistic about our (their) ability to combat it.

The cannabis surge of the last decade appears to be reaching an equilibrium. The overall percentage of Americans using marijuana has fallen slightly over the past six months from its post-pandemic high, even as the number of daily users continues to grow by about a point per year. Non-daily users are in decline. Traditional smoking methods remain the most popular, although vaporizers are gaining among daily users who don’t want to smell like weed and get busted by their kids. The growth of edibles is happening on the backs of non-daily users because if you’re eating weed gummies every day (recreationally), you live a different life than most people. Interestingly, we found a super-strong correlation between people who consume cannabis and use ChatGPT.

Interest in electric vehicles is declining. Even as ownership of EVs has ticked up this year, the percentage of U.S. adults who are contemplating one for their next purchase has fallen significantly since 2022. Among those who are still thinking about buying an EV, Toyota is the most popular brand choice, with Tesla second but far behind. What’s otherwise notable from this study is how closely attitudes toward Tesla are intertwined with attitudes toward Elon Musk.

Over-the-air TV viewers are a sought-after bunch for advertisers. Seventeen percent of U.S. households now report using a digital antenna “often” to watch linear TV, with 10% saying it’s the primary way they watch…that means no data about them is being tracked by set-top boxes or streaming platforms. It all creates a big blind spot for advertisers (and TV networks), as this group is particularly tech-savvy and prolific in their spending across upscale dining, beauty, and travel, among other categories. They’re also more likely than average to tune into the Olympics this summer.

Speaking of the Olympics, it could be a big year for merch. With enthusiasm high for the coming Paris games, consumers are reporting a healthy willingness to go out of their way to buy from Olympic sponsors – including nearly half of Gen Z adults. And, with another men’s Dream Team being assembled and the prospects of Caitlin Clark playing for the women’s team, jerseys and other team-branded gear could have a day. To warm your heart, the number one reason consumers plan to buy Olympic merch is for “national pride,” a sentiment that feels lost sometimes in our shit-show of political discourse. Go America!