Is Prestige Beauty Hitting Its Peak? Beauty Industry Insiders Don’t Think So.

In a recent Business of Fashion article, beauty correspondent Daniela Morosini wrote, “In beauty, prestige may be at its peak,” and highlighted challenges facing the sector such as crowding, the quality of masstige and mass brands, and limited distribution options.

The article was published amid a compelling sales performance for prestige beauty, which market research firm Circana estimates grew 14% to reach $31.7 billion in 2023. By contrast, mass beauty sales grew 6%. Circana forecasts continued growth for prestige beauty. In a Beauty Independent In Conversation webinar last year, Jennifer Famiano, director and beauty industry analyst at Circana, said, “The bottom line is that beauty is a really strong industry with a consumer that finds value in what we add to their lives.”

We were curious whether beauty industry insiders believe prestige beauty is hitting a peak. So, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked 20 beauty industry consultants, investors and founders the following questions: Do you think prestige beauty may be at its peak? What challenges do you see facing prestige beauty brands, and what opportunities could they take advantage of in the current market?

Amber Williams Independent Brand Strategy Consultant and Fractional Chief Brand Officer, The Board

As a brand strategy executive who worked to develop 47 beauty brands in 2023, I can confidently say that prestige beauty has not hit a peak, nor is the category fading in the least bit. Consumer segments that aspire for higher in product efficacy and the long-term promise of a brand continue to set new standards of expectation that drive growth.

Gen X consumers, for example, boast increasingly high disposable income ranges and desire tailor-made, prestige brand and product solutions that speak not just to their functional needs, but the emotional needs they face through the onset of pivotal life change. For them, personalization and elevated brand association are stronger factors than price value.

Skincare and makeup obsessives are also prioritizing prestige brand association and personality-to-product aesthetic alignment more than ever, only weighing price as a single factor in their decision-making process.

Similar to the spending behaviors we find in luxury beauty, true prestige customers buy who they want to be and seek meaning beyond the material. Today, the “burden of proof” for distinction from mass beauty options is significantly higher, but there are still those who successfully achieve it, albeit sometimes quietly.

The three biggest challenges I see facing prestige beauty brands in the current market include solidifying cross-cultural relevance, defining an ownable point of view that garners affinity separate from single product performance and fostering a prestige customer experience from A to Z.

In 2024, pathways of growth have become less formulaic and increasingly varied. Prestige beauty brands have more opportunities than ever to pursue avenues that allow for scale from an aligned perspective.

New luxury hubs such as boutique hotels and exclusive spas continue to increase their demand for prestige skincare, body care and haircare. Fostering such partnerships offers a brand more control over its perception and presence while reaching more of the right customers in the right places.

In their constant attempt to distinguish themselves from mass-market options, prestige beauty brands must stay abreast of cross-cultural viewpoints, functional and emotional product expectations and elevated shopping patterns.

Resources like WGSN, Nielsen and McKinsey offer powerful global insights that, when harnessed properly, may give prestige brands the forward-thinking foundation needed to cultivate a compelling brand position that attracts, engages and converts for reasons more tenable than mere price value.

Karen Hayes Founder, Indie Global Strategies

No doubt, there will be winners and losers in the current environment, and there will be a shakeout. With the challenges of DTC, most brands need wholesale, and there are just too many brands for too few points of distribution. Morosini is definitely right about that. But the overall prestige market will continue to grow.

Brands likely do need to seek out additional avenues for growth, and international expansion is a promising way to do so. Prestige beauty is expected to have global growth of 4% to 6% over the next five years. That’s even with the slowdown in China, and other markets, though smaller, are growing faster than the U.S.

This offers American brands an opportunity to diversify and guard against an overdependence on their domestic businesses. Not to mention, brands working towards an acquisition need to prove market fit not only in North America, but in other countries as well.

Conventional wisdom used to be that brands should wait at least five to 10 years before considering international expansion, but with social media that window has shrunken considerably. If an indie brand has a proposition that will resonate with their customer, international retailers are eager to bring them on at an early stage.

Operationally, international markets can be complex, confusing and demanding, and leadership teams do need to ensure they are prepared and properly resourced, but there is definitely a growth opportunity to be had outside of North America.

There are amazing international retailers who really understand brand building and are excellent partners to indie brands. Mecca in Australia, Niche Beauty in Germany, Oh My Cream! in France and Cult Beauty U.K. are among the best and hold so much potential for young brands.

And that’s just the beginning. With the right strategy, there are opportunities for indies in every corner of the world. Emerging markets like the Middle East, India and Southeast Asia are also hungry for what they see coming out of the US.

Prestige is not at its peak. It may see some dips. Like all markets, an infinite straight line up is not realistic. But there is every reason to believe that there are bright days ahead for the global prestige market overall.

Cristina Nuñez Co-Founder and General Partner, True Beauty Ventures

Prestige beauty sales grew 14% in 2023 and was the only industry tracked by Circana to post unit growth. Prestige beauty has grown at this double-digit rate for the last several years. While some might say that slowed growth is inevitable, all signs lead to continued momentum as prestige beauty consumers repeatedly prove their resiliency.

We do not believe prestige beauty is at its peak despite increased competition and slower economic growth because prestige beauty consumers are purchasing more and more. We believe the category is set up to succeed with many opportunities heading into 2024.

Here are five reasons why:

  1. Smarter consumers who are more selective in choosing products are looking for higher quality, efficacious products and are willing to spend to get results.
  2. The influence of TikTok is driving more purchases with less price sensitivity, with impulse checkout and TikTok shop versus an open-sell setting with multiple brands competing for the consumer’s attention.
  3. There’s a growing consumer base as evidenced by gen alpha flocking to specialty retail, looking to keep up with the influencers they follow and buying routines flooded with premium brands such as Drunk Elephant and Glow Recipe.
  4. Fifty percent of prestige beauty consumers are from high-income households and are therefore less affected by macroeconomic changes.
  5. For the other 50% of prestige buyers, they often look to beauty as an indulgence when more expensive luxuries are off the table in harder times.

The challenges facing prestige beauty brands is the importance of Sephora and Ulta to their growth, and the level of difficulty brands have securing this distribution. A brand’s ability to scale profitably is more difficult without one of these retail partners. In addition, the industry is oversaturated with brands, and it can be costly to cut through the clutter.

However, given the reasons above, we do continue to believe the prestige beauty industry is still poised for strong growth in 2024.

Prestige beauty in my view is at peak saturation, but not peak growth. There are way too many brands that do not have a great product or identity, but have managed to get to a small scale. Some have even been able to raise significant capital. However, without strong differentiation they ultimately fall into a sea of sameness, and then they start competing on price and spending heavily to stay relevant, which is unsustainable.

Additionally, the reality is that there are limited distribution opportunities in brick-and-mortar retail, and those retail partners need to be incredibly discerning with the brands they bring into their stores. While I understand this, retail has also become somewhat ubiquitous, and I hope to see more risks being taken with brands that are brought in to differentiate and expand the category and the customer base further.

There are a few important considerations for brands as it relates to their success. Top of mind is strong brand identity and understanding your loyalist. What do they love about your brand or its purpose that serves a need? What does the brand do the best? What problem do they uniquely solve? For me, science and facts matter, so is there a foundation and credibility to the brand?

Another hard truth is that brick-and-mortar distribution is important and critical to success in the prestige environment. Consumers want to connect, experience and explore, and retail stores provide this. Retail store distribution also provides an opportunity for awareness and a partner to help support that awareness and growth. In order for a brand to truly succeed, they need to have retail store distribution of at least 35% with a focus on expanding here in a way that they can support financially over the long term.

The industry will continue to see brands fold over the coming year as a result of several factors, but mainly lack of differentiation, weak brand identity and lack of focus. The good news is that the brands that remain will be highly differentiated with a strong identity and a loyal customer base.


I would agree with the article referenced that prestige and luxury brands are challenged with lack of service and experiential distribution options. On the other hand, I disagree with the statement that prestige beauty may have peaked. In fact, I personally think it's quite the opposite scenario. Masstige is the category that most likely is peaking.

Few would argue that the industry in its current state is saturated and over commoditized, and it is primarily saturated in masstige. It is understandable and predictable. We have experienced a perfect storm of an economic crisis, the demographic growth and influence of gen Z, who in large part is price-conscious, and the rise of TikTok. This has also resulted in increased promotional activity, and we are about to hit rock bottom.

The cost of doing business with retailers is high across the board, not just in prestige/luxury, but in masstige and mass retailers, including Amazon. Unless scaling massively, it's a challenge to be profitable with current margins. The financial community is looking for improved profitability.

Add to this that masstige is a ubiquitous segment. Unless there are large marketing budgets, brands will always be vulnerable to private label or knock off brands. It is not prestige or luxury consumers that are buying dupes. Does the premium customer want service and experience?

Of course, highly efficacious and innovative products require higher margins to afford the necessary investments. An example is that clinicals in skincare are now table stakes. Customers are willing to pay for them.

These friction points will influence a shift back to prestige and luxury, and the retailers will follow. The most important thing is to find unique ways to deliver meaningful value in all price tiers. Because anything less than this definitely has peaked.

Monica Gallegos CEO, Stratosphere Beauty

Skincare has reached its peak both in the affordable and prestige markets. The industry has seen extensive innovation and technological advancements, covering almost all areas.

Consumers remain loyal and are willing to invest in essential products like serums and creams, while they may be more open to experimenting with more affordable options like cleansers, toners and masks.

On the other hand, there is still some untapped potential in the prestige makeup segment. There is room for creative innovation when it comes to color cosmetics. The Margiela show with Pat McGrath's viral makeup demonstrated that the possibilities in makeup are limitless.

Andrew Ross Senior Advisor and Venture Partner, XRC Ventures

This is one of those times where two things that appear opposite can actually be true at the same time, especially when you consider dollars versus units.

Prestige has outperformed mass consistently over the last five-plus years on a dollar basis, although there are always cycles by category, especially in makeup. This was driven by (consumers looking to trade up to higher quality or at least perceived newness), market structure (growing retailers like Sephora being much more open to brand-building and innovation, department stores losing share but still somewhat relevant), and capital (venture capital and private equity firms targeted prestige because margins were higher, and there was a clear path to exit through Sephora and strategics focused on prestige).

All those drivers have either changed or become less clear over the last two or three years in particular. Consumers are much more educated and affordable brands like Bubble and The Ordinary deliver formulations that are higher quality than many prestige-priced brands.

Dupe or “duplicate” culture is rife in makeup. In many cases, innovation in consumer engagement and marketing is being led by more affordable brands: Bubble’s community, E.l.f.’s recent experiment in long-form video or Michael CeraVe.

Ulta allows consumers direct comparison across all price points and is winning versus Sephora. Walmart and Target have increased both their focus and their flexibility to encourage disruptive brands. Amazon continues to make inroads on convenience. Recent exits like Naturium, Hero Cosmetics and RoC Skincare demonstrate that there is also now a path to liquidity for capital in mass.

What hasn’t changed is consumers’ love for and engagement with the beauty category, and that continues to fuel a desire to explore and trade up where there is perceived value. That means luxe continues to grow in particular fueled by skincare, haircare and fragrance, and some makeup subcategories like lip, e.g., the success of Tom Ford, Dior, K18, Augustinus Bader, Le Labo and Nécessaire in body.

So, rather than “peak prestige,” you are starting to see a bifurcation in the market where growth is being driven at both ends, with unit growth concentrated in mass and masstige and dollar growth concentrated in luxe. The danger zone is in the middle.

For prestige brands, especially those in the greatest danger of being “stuck in the middle” there is a three-part prescription to earn your price premium, trial and repeat purchase.

  1. Reexamine equity and product value versus mass and masstige across your assortment. Are you really offering something distinctive in terms of formulation, packaging and/or experience? Where are consumers still looking to trade up by subcategory, e.g., lip? Your channel presence is no longer enough to justify an automatic price premium, especially when your competition is right across the aisle or one click away rather than in another store.
  2. Reinvent your marketing and consumer engagement model. Old playbooks just don’t work anymore. You have to engage with consumers and break through, which means data-fueled, relentless experimentation, taking risks on form and content especially at the top of the funnel, and the agility to rapidly amplify what works.
  3. Restructure your channel strategy around the consumer and not outdated definitions of which channels are brand-building and which are brand-leveraging. You have to have a harmonized direct, online and wholesale strategy centered on the consumer that aligns and supports your prestige brand equity.
Cassie Cowman Co-Founder and Partner, View from 32

At View from 32, we do not believe prestige beauty is at its peak. The industry always ebbs and flows, going through stages due to constantly changing client desire.

All of these 10-year-olds everyone is talking about in Sephora, their tastes and needs will continue to evolve. They are the future prestige client with sophisticated tastes. They will be savvier, more educated and more discerning, but they will make the brands better for it. This hunger for more will continue to push brands further to innovate.

Within prestige beauty or any category, the consumer has and will always be looking for what the next trend is, and new brands or products will emerge to capitalize on these trends. If they fill a whitespace and make good products, retailers such as Sephora and Ulta will always be interested because their clients are interested. Thus, the cycle continues.

The number of brands has likely hit a peak. Many will be faced to close, pivot or adapt. The challenges are not different from what they always are in terms of having the right product, the right people behind it and the right brand positioning.

Today, a brand must approach that unique positioning with more precision than ever before. They also must clearly know not only who they are, but who their client is and be able to connect with them on a deeper level, grow with them.

Brands can take advantage of the current market by standing out and doing something truly unique. They can use this crowded environment to fuel innovation and push themselves harder to distill who they are very early on in their journey. Building a brand solely as a business case study will not work today.

We know prestige brands are always looking to what’s next in molecules, ingredient stories, textures and delivery formats to give better and faster results. It’s the classic playbook on steroids, and the stakes have never been higher.

Laura DiGirolamo Founder, Brand New Beauty

Every few years, especially when the economy trends downward, this question gets asked. Sure, during economically challenging times, it’s logical for people to pull their purse strings tighter and look for beauty bargains.

And, as sustainability becomes a more serious consumer and regulatory expectation, prestige brands by nature will struggle to satisfy with their more lavish approach to beauty. So, on the face of things, it would seem prestige beauty might be “hitting its peak.”

This line of thinking, however, negates the real reason most people seek out, fall in love with and stay loyal to any brand—the feels. My short answer is therefore this: Those prestige brands (and arguably any brand) that have done the hard(er) work to create an offering that goes beyond just what they sell, which authentically resonates with people, will be “peak-proof.”

Now, more than ever, my focus with clients is to help them find and define their real, larger-than-life purpose and anchor their brand in a “mission that moves.” This approach fosters a team whose devotion and passion will take your brand through even the most challenging times.

It will also help create a meaningful offering that keeps customers coming back, regardless of market trends or realities. Think Goop. If your brand offers more than just beautiful product, and would die by the sword, so to speak, it will stand the test of time.

What’s the opportunity in this current market? Take the time and energy now to reconnect with your brand’s soul and make yourself “peak-proof.”


This feels like a statement that was designed to provoke, not a bad thing as I am all for healthy debate, but I don’t agree with it. If you were to spend some time with my daughter and her 12-year-old friends, you definitely would not think that prestige beauty is at its peak!

In many ways, this younger generation is just getting started, and their engagement with beauty—and prestige in particular—is stunning. While LVMH does not disclose Sephora-specific financial performance, its specialty retailing division had an outstanding recently reported quarter, and we can surmise that this was driven by excellent performance at Sephora. Have you ever seen a Sephora not crowded over the past year?!

Moreover, the U.S. consumer is healthy, and their confidence has improved in recent months. We appear to have avoided a recession, and so I don’t worry about nervous or strained consumers trading down to mass beauty products. We are also seeing quite a bit of product innovation focused on efficacy in skincare. This helps to drive consumer engagement in the category.

That said, it is also the case that there are outstanding mass and masstige brands out there. I expect some of these to continue to exhibit strong growth, for example, brands like E.l.f., Versed, Bubble and The Ordinary as well as older brands like Cerave. Those brands are doing a great job. There is something for everyone.

Now, the point that the journalist makes around channel is an excellent one. It is true that specialty beauty has oligopolistic characteristics, and this does pose a challenge for some emerging brands. The price to play in those retailers is high, and for many brands, it makes sense to do more testing and learning before they go big with a large specialty retailer.

Of course, there are myriad small beauty retailers. Some of these do an excellent job with brand curation and customer education, but they generally don’t deliver scale to emerging brands, which can become a challenge. More and more, emerging brands are leaning into Amazon in order to drive volume beyond their DTC and small retail partners. This certainly has potential.

Still, I’d love to see more creative go-to-market strategies that emerging brands can pursue. Professional distribution has been fruitful for some brands. I encourage emerging brands to keep an open mind with respect to distribution strategy. There is no playbook here, and creativity is likely to be rewarded as brands carve out differentiated and defensible strategies.

Elizabeth Lim Strategic Advisor, Joyance Partners

The U.S. prestige channel reportedly outpaced mass channels in 2023 by double-digit growth, and while researchers are anticipating a slowdown, the prestige market remains optimistic. This segment will continue to see growth even though it may be at a slower pace. Increased competition from mass and masstige brands, dupe culture and blurring of distribution channels will continue to challenge the prestige market.

Prestige brands should remain committed to high-quality innovative products with proven results and timeless design. Consumers also seek exclusivity and unique, memorable experiences, hence being selective with retail partners could be key to maintaining an aura of prestige.

There is also an incredible white space opportunity to lean in on the generation X consumer currently between the ages 45 to 60. Often known as the "forgotten generation," yet they outspend both boomers and gen Z by a respective 44% and 18% according to Circana.

In addition, they are expected to be the wealthiest generation as a number of independent studies agree that gen Xers have a substantial nest egg for spending and will also soon inherit trillions from their baby boomer parents. Gen Xers are also highly engaged in social media and continue to shop in brick and mortar.

These wealthy consumers could prove to be even more valuable as customers than millennials and gen Z in the coming years. This presents a huge opportunity for prestige brands seeking to gain loyal customers that also has the means to shop higher price points.

Alyse Zunino Founder and Creative Director, Eminence Brand Development

The beauty industry's prestige segment may be facing challenges related to market saturation, changing consumer preferences and the emergence of niche and indie brands. Increased competition, concerns about the quality of masstige and mass brands and limited distribution options contribute to these challenges.

However, opportunities exist for prestige beauty brands to thrive. Innovating and differentiating products, focusing on sustainability, embracing digital and e-commerce strategies and exploring collaborations and limited editions can help these brands navigate the competitive landscape.

Customization and an emphasis on ethical practices are additional avenues for growth. Success in the dynamic beauty industry requires adaptability to evolving consumer trends and market dynamics.

Sonia Summers Founder and CEO, Beauty Barrage and Beauty Strategy Group

I disagree with the BoF article. I do see that prestige beauty will continue to grow this year mainly because of the multigenerational customers, baby boomers, gen X, millennials, gen Z and now gen alpha. TikTok has introduced gen alpha to key beauty items. We have also all heard about how they are charging into retailers like Sephora and trying everything.

Another reason why it will continue to grow is that the consumer is much more educated. They scour the internet for information on beauty products, regimens, etc.

Also, while mass has become competitive with prestige-type ingredients, they don’t have the same amount/percentages, so not as effective in some cases and the customer who does their research will know this.

What I do believe will happen this year is that we will see more brands folding because of the crowding and the expense of running a beauty brand.

Kim Woodell Founder, Kim Woodell Consulting

Prestige beauty will always be in demand as consumers see it as a form of self-care that provides an elevated experience. Brick-and-mortar sell-through remains a challenge due to retailers’ skeletal staffing and/or high turnover. We see the best results for emerging prestige brands when we plan and execute store visits with founders and their brand teams.

Those who roll up their sleeves and work shoulder to shoulder with key salespeople are able to build genuine relationships while providing elevated products and customer experiences. Getting back to basics is what resonates.

There will always be opportunity for prestige beauty brand because what a prestige price point, distribution and positioning all ultimately signify is value. So, when the market grows, brands offering superior value is where customers will first choose to use their discretionary spend.

And when the market contracts and consumer spending tightens, customers will still always choose value, whether it's lower priced, affordable brands or the higher priced prestige brands that offer higher quality, experience, or emotional reward. It's the brands that fall in the middle that lose out.

Therefore, the challenge that prestige brands face will be to figure out how to effectively convince and communicate that they do, in fact, offer higher value and not cut corners, thereby hindering their ability to deliver on the elevated brand promise.

ODILE ROUJOL Founder, Fab Co-Creation Studio Ventures

We are not yet at the peak. The very best moment will be in the coming years for prestige beauty. Why? There are more bridges between beauty/wellness, health tech and women’s health. The longevity space is a whole new territory and not just for educated biohackers living in the top cities of the world. It’s becoming mainstream.

To be successful, prestige beauty brands will have to deliver on their promises. It’s not any longer a cool site and fancy Instagram. It’s about being perfect in execution and having an ultra-rigorous way to develop products (topicals and supplements) surrounded by relevant experts. The magic of a brand and its unique experience is the reason to believe it and repurchase its products.

Kimberley Henney Director of Independent Retail and Brands, KSJ Collective

I do not see prestige as being done at all. In fact, I’ve experienced retailers as of late commenting that their younger demographic/aspirational customer is looking for those little bits of prestige indulgence to enhance and increase incorporate. This particular customer segment feels that they’re willing to invest as they think it will be more efficacious.

In regards to the more established client, she values her skincare and is still willing to invest here regardless the state of the economy. She is likely more selective in the way she curates her skincare routine and may replenish a little closer to when product runs out. I do not see this segment of skincare on the decline.

ALEX KOURI Director of Independent Retail and Brands, KSJ Collective

I do not think prestige is hitting a peak. I actually think it could be on the rise again. People are coming back to what they know works—high-performance products with more expensive ingredients.

Ashley Hall Director of Brand Development and Sales, KSJ Collective

When I think about prestige what resonates with me is that's always something I go back to and trust. While experimentation is more likely in the mass and masstige sectors, there is a certain kind of loyalty associated with prestige which can/has also translated to longevity in the legacy brands. For example, I have tried hundreds of different SPF formulas and always go back to Chanel. I trust it.

Jennifer Jeanneret Director of Operations and Communications, KSJ Collective

I don’t think prestige is done at all. In a recent podcast on the top trends for spending patterns in teens, the interesting spending trends were around beauty. While mass was a top contender, this younger demographic has a taste for the bougie things in life.

Looking at a broader demographic, historical data would show that people look at beauty as the affordable “luxury” or “splurge” during economic downturn or uncertainty. I think this trend is poignant for today’s market and customer expectations will be higher on ingredient performance, sensorial excellence and true novelty.

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