Could beauty be the prescription to spice up drugstore foot traffic? 

That’s one topic on the agenda as brand and retail executives meet on the National Association of Chain Drug Stores Annual Meeting kicking off on April 27 at The Breakers Hotel in Palm Beach, Fla.

Greater than 50 retailers — including Walgreens, Goal and Amazon — are registered together with beauty leaders from Coty, L’Oréal, Procter & Gamble and Unilever. Smaller firms like Raw Sugar and first-timer Onyx Brands are scheduled to satisfy with retailers in hopes of staking out an even bigger slice of the $93 billion total beauty category, as tracked by Circana.

While pharmacy, which accounts for as much as 70 percent of sales in some drugstores, traditionally dominates chats through the show, beauty is anticipated to generate the excitement this yr, especially for the reason that category registered double-digit sales gains over the past three years.

That’s due to brands like L’Oréal, E.l.f., Milani and Coty, which have leveled up their products to court customers.

“Team Coty is desirous to engage with our retail partners and showcase the impressive achievements we’ve made,” said Stefano Curti, Coty’s chief brand officer. “In February, we reported our 14th consecutive quarter of leads to line to ahead of expectations. This reflects how we’re delivering on our strategy in a profitable way.”

Curti pinpointed positive results from the revitalized Cover Girl brand, such a Simply Ageless Essence foundation. “It’s a chief example of our market leadership in ‘skinified’ makeup,” he said, “designed for top visibility on social media and powerful influencer engagement.”

Herrish Patel, president of Unilever USA and chief executive officer of Unilever Personal Care North America, will discuss how that company is elevating its core brands with launches like Dove Body Seru and SheaMoisture deodorants.

“We’re seeing passion for mass brands which have high desirability and exceptional product performance — think Vaseline, Dove, SheaMoisture and TRESemmé,” Patel said.

While brands have upped their game, they’re trying to retailers to do the identical, with easy-to-shop environments that reflects product innovation.

“The moment of truth is in the shop,” said Nathalie Gerschtein, president of L’Oréal Consumer Products Division, North America. “We’re going to discuss products, but we’re also going to debate in-store elevation,” added Gerschtein, hoping her experience in Asia will likely be a model for upgrading U.S. stores. “People don’t shop for beauty the best way they do groceries. We’ve got to acknowledge that and keep elevating.”

L’Oréal’s playbook for “delighting customers” includes delivering innovation faster to market and seamlessly combining marketing and promoting with physical experiences. For example, Gerschstein cited NYX Skilled Makeup’s Super Bowl business starring Cardi B and Duck Plump Extreme Plumping Gloss that was tied to in-store activity for a 360-degree campaign. 

Still, the sheer variety of doors operated by mass retailers presents obstacles to implement upgrades. “The challenge is the right way to scale,” said Larissa Jensen, Circana’s senior vice chairman and wonder adviser. “But you continue to wish to feel you’re getting an excellent experience when buying at a drugstore or mass merchant.”

There are indications of a mass retail store renaissance — a much-needed boost to stores which have remained largely unchanged in a long time. For example, RPG partnered with CVS to reinvent its in-store experience. “A key driver of the design approach was to make sure CVS gets credit for its large assortment that’s now displayed in a way more accessible, appealing fashion,” said Bruce E. Teitelbaum, CEO of RPG. Custom-designed gondolas offer flexibility in shelf application and are not any longer confined to straightforward merchandising configurations. “This offers the patron a totally fresh approach to drugstore shopping,” Teitelbaum said.

Walmart is remodeling 650 stores this yr to reflect its Store of the Future with improved layouts, expanded product selections and technology to support the shopping experience. Beauty is certainly one of the categories that’s getting the most important facelift. Meanwhile, Goal is constructing out wellness destinations inside stores that include personal care items.

With macroeconomic worries hanging around, some experts predict some shoppers are able to pivot to lower-price point brands.

“For years, prestige beauty growth has outpaced mass, but we’re beginning to see that change,” said Scott Kestenbaum, chief growth officer at Maesa. “In line with Circana, masstige brands are outpacing growth of each prestige and mass at once. I see this trend continuing less as a function of consumers trading down, but more attributable to a subset of mass brands stepping up their game, closing the actual and perception gap between the 2 sides of the aisle.” 

Kestenbaum added that mass brands borrowed strategies from prestige, offering stylish packaging and efficacious formulas at accessible prices that especially resonate with younger shoppers. 

“Gen Z and Gen Alpha want the premiumization of beauty without the premium price tag. A few of the fastest-growing brands at mass, similar to E.l.f., CeraVe, Bubble, Being Frenshe and High-quality’ry are a testament to this shift,” Kestenbaum said. 

While industry insiders remain bullish overall on beauty, rumblings about overall spending contracting could translate into greater mass volume. 

“In our spring 2024 report, spending on beauty ranked among the many lowest priorities across all categories, with a notable decrease to fall 2023,” said David Schneidman, senior director at Alvarez & Marsal’s Consumer and Retail Group, who added shoppers are prioritizing essential items similar to food and private care versus nonessentials similar to jewelry and wonder.

“Regardless that spend on beauty is decreasing,” he continued, “it could signal that mass beauty retailers are in a position to capture a bigger share of the general market as consumers seek for cheaper alternatives and never to reduce all together.”

Matt Fishbein, senior vice chairman at BWG Strategy, said industry feedback during research sessions showed pickup in consumer interest in mass brands is driven by “increased consumer spending cautiousness and a deal with value.”

He also noted a a shift to established brands, which frequently occurs in uncertain economic times. “It’s fair to assume that we’ll see mass brands’ relative strength proceed so long as consumer sentiment on the economic outlook stays volatile,” Fishbein said, “which is more likely to be the case until sometime after the presidential election.”

The recently published WWD Beauty Inc’s Top 100 showed mass players, including L’Oréal’s Consumer Products Division, Beiersdorf and Unilever, registered their strongest gains in several years — perhaps a harbinger of what’s to return. 

While Jensen isn’t convinced individuals are ready to present up a favourite lipstick or scent, data shows they’ve accepted popular-priced skincare, the one category in mass beauty to post unit growth relatively than generated dollar gains via price increases, in line with Circana. “When you have a look at the brands with the gains [in the Top 100], all of them play in skin. This yr is the season of skincare. You might have older consumers searching for treatment and the emergence of younger consumers discovering beauty and entering through skincare,” she said, explaining consumers don’t feel they’re trading down for mass, but buying the lower-priced brand because they comprehend it works.

The drug channel, particularly, stands to profit from beauty’s strength. In line with NielsenIQ data, beauty sales within the drug channel rose 5.8 percent last yr, lagging behind discounter gains of 10.3 percent and supermarket’s 7.6 percent increase. Drugstores don’t have the advantage of footfall generated in fellow mass merchandise stores by apparel and groceries. 

“Discussions [at NACDS] will hinge on the relevance of the drug channel,” said Wendy Liebmann, CEO of WSL Strategic Retail. “The challenge that channel is facing is shopping trips and access. They’ve taken price increases and locked up merchandise — so how are they going to grow business in the event that they don’t do something different and latest?” 

Retailers have to do greater than discount. “To ensure that mass to do higher, it isn’t nearly price. It just can’t be an assumption people will trade down. What is going to get people to spend more in mass is quality and innovation,” Liebmann said. “Beauty — hair color, hair, healthy skin, fragrance, bath — are all categories which have a possible to be trip drivers, especially with younger shoppers.” 

Milani is an example of a brand hitting the sweet spot. The indie is currently number seven in mass beauty and has posted 10 consecutive quarters of sales growth that has outpaced the category. “We’re seeing significant momentum,” said Mary van Praag, Milani’s CEO. “Our average price point is around $10, which represents an incredible value. You may refill your makeup bag with Milani for $50, roughly the equivalent of 1 bottle of prestige foundation.”

The brand is certainly one of a cadre benefiting from social content creators talking up dupes. One example is influencers comparing Milani’s Cheek Kiss Cream Bronzer to pricier brands like Makeup by Mario and Patrick Ta.

Retailers like Walgreens see demand for the alternatives. “We’ll proceed to supply premium skincare swaps at accessible prices,” said Heather Hughes, group vice chairman and general merchandise manager for health, wellness, beauty and private care.

Her other priorities include natural, secure and effective brands and products with environmental sustainability and affordability in mind. “At NACDS, Walgreens goals to underscore the importance of prioritizing consumer value, particularly in health and wellness, simplifying the shopper experience and fostering engagement.”

Macroeconomic conditions also point to greater acceptance of personal labels and value brands.

“Since 2017, the worth of health and wonder products has increased by 17 percent, with grocery items even higher at 23 percent. This shift has not gone unnoticed by consumers, who’re increasingly turning to cheaper options like store brands,” said Scott Emerson, president of The Emerson Group. “As shoppers remain price-conscious, the trend toward value-driven purchases will persist, leading to sustained growth for budget-friendly brands like Dove and Suave.”

The expansion of TikTok as a sales driver and some extent of sale will even be on the front burner. “The launch of TikTok Shop within the U.S. has develop into a serious retailer disruptor. Actually, as of February of this yr, it’s the number-nine health and wonder e-commerce retailer within the U.S,” said a spokesman for NielsenIQ.