Cosmetic and Beauty Supply Stores NAICS 456120

Jan 9, 2026 - TikTok, AI Intensifying Beauty Competition

• Competition for the $129 billion US beauty and personal care market is intensifying as consumers increasingly rely on social media, AI tools, and e-commerce rather than in-store advisors, according to a report in US News and World Report. Sephora and Ulta, which disrupted department stores starting in the late 1990s with self-service, experiential formats, now face pressure to keep innovating as Amazon accounts for nearly half of online beauty sales and TikTok Shop ranks seventh nationwide. Sephora is renovating all 720 North American stores, streamlining checkout and enhancing digital tools, while Ulta is expanding services such as ear piercing, robotic manicures and planned robotic lash extensions. Social media drives trends, “dupes” discovery and purchasing behavior, reducing store loyalty. Retailers are racing to blend technology, services and convenience to remain relevant in an increasingly digital-first beauty landscape.
• Circana reports solid US beauty industry growth through Q3 2025, creating favorable conditions for cosmetics and beauty retailers, according to a report in Beauty Packaging. From January to September, prestige beauty sales rose 4% to $24.1 billion, while mass market sales grew 5% to $54.5 billion, with unit growth in both segments. Fragrance-led performance, with prestige up 6% and mass fragrance surging 17%, driven by both luxury and mini formats, key opportunities for in-store merchandising and gifting. Color cosmetics posted 3% growth in prestige, with lip products outperforming and eye makeup returning to growth, supporting traffic across makeup categories. Skincare growth was modest in prestige (up 1%) but strong in masstige (up 14%), while haircare delivered robust gains, including an 8% increase in prestige. With one-third of consumers planning to gift beauty products, retailers remain well-positioned to capture continued demand.

• The Body Shop, a popular British beauty business that operated storefronts in the US, returned to US sales in October 2025 through a dedicated US website and an Amazon storefront, according to a report in Retail Dive. The brand will offer bath, body, skin care, and hair care products and expects to expand into fragrances, with a focus on the company's "purpose-led" and "cruelty-free" mission against product testing on animals. The Body Shop was bought by a group of investors in 2024, out of UK administration. The Body Shop's US stores operated from 1988 to 2024, before ceasing operations after the US arm filed for Chapter 7 bankruptcy in 2024. The company said the new US presence is part of its plans to rebuild its international presence.
• While five services industries reported contraction in December, 11 industries reported growth, including the Retail Trade industry, according to an ISM Services PMI Report. Executives in the Retail Trade industry reported increases in business activity, new orders, employment, prices paid for materials and services, and inventories, along with decreases in new export orders, imports, and order backlogs in December. Other industries reporting growth during the period were Finance & Insurance; Accommodation & Food Services; Transportation & Warehousing; Arts, Entertainment & Recreation; Mining; Health Care & Social Assistance; Information; Wholesale Trade; Public Administration; and Utilities. Industries reporting contraction during the period include Management of Companies & Support Services; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Educational Services; and Construction. Overall economic activity in the services sector continued to expand in December, registering 54.4%.