With resilient performance, the $441billion global beauty industry has earned a reputation as a “recession-proof” category. But ongoing political and economic uncertainty is undermining customer confidence, making some beauty consumers re-evaluate their purchases, according to the latest Business of Fashion (BoF) report.

Research of global shoppers in The State of Fashion: Beauty report revealed that a quarter (24%) of consumers opted for cheaper beauty products in the past 12months. This follows the latest retail sales data from BRC-KPMG which shows UK consumers are cutting back on non-essential spending, with discretional spend down -1.1% year-on-year.

Shoppers scrutinise value as beauty spending slows

With consumers becoming more considered about non-essential spending, this is putting greater pressure on the perceived value of ‘affordable luxuries’, such a beauty products, among consumers. The BoF report suggests reduced spending power will prompt consumers to become increasingly attuned to the “true value” of products.

Three quarters (75%) of beauty execs polled in the report expect shoppers’ scrutinising value to be the biggest force influencing the industry in the mid-term, while 54% expressed concerns that a reduced spending appetite is on of the biggest risk to the sector’s growth.

“Volatility across all industries is threatening to catch up with beauty,” Priya Rao, Executive Editor at The Business of Beauty, said. “Customers are not in a position to spend on products with no real innovation or added value, requiring better brand focus and differentiation.” 

Dupe culture is rising, driven by Gen Z

With price sensitivity among shoppers rising, so too is “dupe culture”; 53% of the consumers polled by BoF say they are now open to buying lookalikes of higher-priced branded products. 

eMarketer’s research also suggests this growing dupe culture is being driven by the Gen Z cohort, with 71% of Gen Zers sometimes or always buying cheaper, copycat alternatives to branded products.

“The age of excessive consumption has given way to a new emphasis on value, differentiation and individuality,” Kristi Weaver, Senior Partner at McKinsey, said.

“Brands have more avenues than ever to capture consumer attention, but beauty industry players will need to work harder to stand out from the crowd and navigate the current challenges effectively,” Weaver concluded.