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US beauty demand is normalizing as price sensitivities creep into purchasing behavior: That鈥檚 good news for e.l.f. Beauty but an added struggle for Coty and Est茅e Lauder, for which China remains a hurdle.

Fenty Beauty makes a play for gamers: The brand partnered with Netflix's 鈥淎rcane鈥� animated series that鈥檚 based on the 鈥淟eague of Legends鈥� video game to roll out a gamer-inspired collection.

Inclusive brands, exclusive growth: Beauty companies that champion inclusion unlock new customer segments and drive higher sales, a Circana and SeeMee Index study shows.

As AI advances, a new era of creativity has unfolded for beauty brands. By infusing AI into their online strategies, beauty brands have an opportunity to drive a stronger return on ad spend and reach consumers in ways never before possible.

Cosmetics and beauty make up a nearly $100 billion industry in the US, and next year more than one-fifth of those sales will come from ecommerce, according to our forecasts. In order to win over beauty shoppers, and Gen Z ones in particular, brands need to pay close attention to where their digital ad dollars go. Here are five charts to help you out.

A resilient category: The beauty industry has been mostly resistant to the pressures facing other forms of discretionary spending, thanks to the lipstick effect as well as the growing association of skincare with wellness and self-care.

Drugstores鈥� decline is hurting the US beauty market: Both Coty and L鈥橭r茅al linked the sector鈥檚 challenges to softer beauty demand, although sales broadly remain healthy as ecommerce and specialty retailers pick up the slack.

Nordstrom targets teens with curated beauty selection: The department store hopes to capitalize on their growing appetite for premium products and desire for in-store purchases.

Our view: Legacy brands can more effectively connect with younger consumers by leveraging the trends and platforms they care about. To capitalize on younger consumers鈥� desire for skincare products, Neutrogena launched Collagen Bank, a skincare line for Gen Z consumers. Collagen Bank will launch directly on TikTok Shop, a smart move considering the role the platform plays in product discovery.

September was style month, with Walmart hitting New York Fashion Week, Levi鈥檚 launching an app for stylist recommendations, Old Navy going vintage, and more. See who else made our September unofficial most interesting retailers List.

Fragrance will be the second-fastest growing category in personal luxury this year, behind cosmetics and beauty, per our forecast.

Here's how people in South Korea spend their time and money online, represented in 10 charts.

Dupes gain steam as shoppers seek middle ground between fast fashion and luxury labels: Quince and Italic are among the brands poised to benefit as shoppers prioritize affordability.

The insight: Private label penetration is on the rise, but there are a few categories that shoppers are reluctant to trade down in鈥攏amely baby care, pet care, and beauty, according to data from Kroger鈥檚 84.51掳.

Sephora targets Gen X shoppers with latest product launch: The beauty retailer is sharpening its appeal to beauty consumers over the age of 40, who spend more on prestige products than any other demographic.

Small-format stores are gaining popularity among retailers trying to get closer to where consumers live and work. Some retailers, like Macy鈥檚, are using small-format stores to reach consumers in more urban locations. But others, like Target, are going for a slightly different demographic鈥攃ollege students.

Digital channels now account for around 10% of personal luxury sales, up from around 1% during pre-pandemic times, per Chalhoub Group. But Euromonitor reports 20% of global luxury sales transact online. And in the US and China, ecommerce will represent nearly 24% of personal luxury sales in each market in 2023, per our forecast. Mobile will drive future ecommerce growth.

Gen Alphas鈥� anti-aging skincare regimen causes concerns: Brands and retailers are under pressure to disclose product risks as tweens copy their favorite beauty influencers.

Our analysts have already made their big predictions for the year ahead, but the newsletter team has a few more to add to the list. As Amazon hits the gas on grocery, it may use its Amazon Fresh stores for fulfillment. Plus, we think beauty will get personal, Amazon could give digitally native brands a helping hand, and a healing economy could spell trouble for discount stores.

鈥淥ne of the challenges is that brands really have to take care to create compelling products when they launch a new beauty line. They can't just expect to put their name on makeup and have it sell,鈥� Canaves said. Brands still need to ensure their luxury DNA comes across with lower-priced items, so the quality has to be there. Listen to the full episode.

What it means: Gen Z may be less motivated by price, but they still care about it. In fact, dupe culture is largely being driven by the demographic seeking cheaper alternatives to expensive products. Brands with higher price points can lean into sustainability or cutting-edge technology to appeal to younger consumers. 3. High delivery fees are a barrier to online purchases.

Dupe culture goes mainstream: Target and e.l.f. Beauty are among the companies benefiting from Gen Zers鈥� affinity for cheaper versions of premium products.

Amazon sees a big opportunity in beauty: The retail giant is hosting the Summer Beauty Haul sales event to capture shoppers鈥� attention, boost retail media spend, and drive sales.

Sales growth for cosmetics and beauty will increase at more than twice the rate online than through physical retail channels this year, according to our February 2024 forecast. While ecommerce is stealing market share, its sales only tell a portion of the buying story. Physical stores are still key to discovering beauty products and brands, finding the right shades, and testing formulations鈥攁nd Walmart is making use of its omnichannel footprint to take advantage. Here鈥檚 how.