Kendall Jenner and Joan Smalls for Estee Lauder

2015 marked a turning point for the US beauty industry, driven largely by shifts taking place within skincare and the heightened importance of Millennials, according to data from researcher NPD Group.

Over the last decade, skincare led the gains within the prestige beauty industry, fragrance was challenged as consumer usage declined, and Boomers drove demand and influenced innovation (just think of skincare’s huge anti-ageing focus).

Tata Harper

But those Millennials get everywhere these days and they’re stealing the lead from my generation (how dare they!)

Today the fragrance category is outperforming skincare, while skincare and wellness are becoming more intertwined, anti-aging is becoming less prominent, and the lines are blurring between make-up and skincare.

For the first time, the fragrance category contributed more annual dollar gains than skincare. Add to that the fact that skincare’s growth came from online sales, while physical store sales declined.

So what’s different about Millennials, the generation that now outnumbers the Boomers? In 2015, NPD found that young Millennials in particular are using more fragrance and fewer of them are using facial skincare products.

When they do use skincare they don’t seem to be going for the “dripping with luxury” approach of the past either. Brands with a natural and/or clinical orientation now represent the largest combined share of prestige skincare sales and accounted for all category gains. In particular, NPD found that Millennial users are most likely to seek products with doctor endorsements and natural/organic ingredients.

Topical products aside, the latest skincare micro-trend is in products that work from the inside out. Treading the line between health routines and skincare regimens, dollar sales of face supplements have grown more than fivefold over the past two years. OK, they’re still relatively small but they became a $4.1m market in 2015.

Brad Biophotonic

Anti-aging skincare sales are dwindling as consumers’ skincare focus has shifted from correction and prevention, to where it is today: preparation. Don’tget me wrong, anti-ageing is still huge (and may become even bigger as Millennials age and start to notice those pesky lines appearing).

But for the first time in two years, age specialist products experienced a decline in dollar sales. While primary care categories including facial cleansers and exfoliators, oil/shine control, toners/clarifyers, and masks saw growth in 2015, the biggest growth areas were in products with an emphasis on complexion preparation. Adding millions of dollars to both the skincare and make-up markets, CC creams and make-up primers alone contributed over $490m to the industry in 2015, growing 58% over two years.

NPD said that though they’re two distinct categories, skincare and makeup now share common goals among consumers, and benefits sought for one category can be applied to the other.

NPD’s facial skincare study found that 72% of product users report they “use skincare products to look the best I can for my age,” while slightly more (76%) of make-up product users also say they “use makeup products to look the best I can for my age.”

While the top appearance benefits skincare users seek include evening-out skin tone, lightening spots/discoloration, and brightening the complexion, make-up products offering these ‘skincare’ benefits are among the category’s best performers, in the form of contouring makeup – one of the hottest beauty trends of 2015 and seeing more launches this year.

Benefit’s new Cheekathon

“The prestige beauty industry has reached a new milestone and a moment of potentially fundamental change,” said NPD’s Karen Grant. “Across beauty, the categories, brands, and products that appeal younger have become the leaders of growth. New or once-overlooked product types are at the forefront, as are new or smaller brands once thought of as less significant. The impact of the internet has further changed the way brands engage with and reach consumers. In this environment, major brands are looking inward and outward to build their presence and equity in ways that resonate with younger consumers, who are not only fresh to the market, but more multigenerational in influence, multinational, and multicultural.”