Generation X is driving beauty sales

Go ahead, Sephora kids.

While younger generations are buying beauty products in bulk, data shows that a different generation holds more spending power: Generation X.

Often referred to as the “forgotten generation,” Gen X includes those born between 1965 and 1980, according to the Pew Research Center. Sandwiched between baby boomers and millennials, the often-overlooked generation hasn’t caught the spotlight nearly as much as its counterparts.

But experts say it could be one of the most important generations in the beauty industry in the next few years.

Gen X will be the leader in global consumer spending by 2033, surpassing $20 billion in spending power, according to data from NielsenIQ. Generation makes up about 25% of total beauty spending, both on beauty products and beauty services.

More importantly, the Gen X beauty market will grow 1.3 times its current size in the next five years, says NielsenIQ.

That growth, according to the company, comes from a culmination of factors: The generation is financially stable and well-positioned, has relied on antiaging methods and longevity, and is heavy on product reliability.

According to Chicago-based market research firm Circana, households with members of Gen X accounted for 44% of the total dollars spent on beauty last year, with skincare being the top category.

“This is in line with how beauty companies are focusing on solutions related to skin health, anti-aging and long-term results, which are all areas that resonate with Gen X consumers,” said Larissa Jensen, beauty industry consultant at Circana.

The group will also see an increase in its spending on hair care and cars, Jensen added.

It’s a trend that has been fueled by a broader focus on good health and anti-aging.

“We are no longer ignoring people as they grow in the beauty industry,” said Anna Mayo, beauty leader at NielsenIQ. “For the first time, we’re seeing brands launch and talk about menopause. … I think that really helps keep people engaged. They feel like they’re not buying something that’s made for a college student.”

Gen X is also in the “spending phase” of their lives, and NielsenIQ estimates that between 2021 and 2033, the cohort will spend $15.2 trillion annually, which is expected to rise to $23 trillion by 2035.

Although the generation spends their money trying different brands and products, Mayo noted that its members have high brand loyalty and are more likely to stick with and continue to invest in a product once it is established.

“Part of this is that the industry has gotten really good at developing products for a very niche audience,” he said. “We’re very young in the era of these kinds of big markets.”

It’s a growth companies are taking notice of, too. In early April, Ulta CEO Kecia Steelman told Yahoo Finance that catering to seniors is part of the company’s business strategy.

“I think 50 is the new 30 and 60 is the new 40,” he said. “So those of us who are aging, we want to age well, so if we can find products that really help with the longevity of the look, we’re leaning towards that.”

Ulta did not respond to CNBC’s request for comment.

Sephora is seeing similar growth, telling CNBC that the company is actively investing in expanding its products targeting the money-hungry Gen X group.

“As we expand our range – especially to our Gen X customers, with products like YSE Beauty by Molly Sims, Sarah Creal and U Beauty – we focus on delivering products with a clear understanding of our consumers’ goals, concerns, and preferences, while promoting authentic stories of innovators and creativity, which we know resonate with our clients,” said Carolyn Bojanow, president of US mehandisirc CNBC in a statement.

Bluemercury, a personal care company, even launched a campaign last year to celebrate women over 40. The company has identified Gen X as one of its biggest opportunities given its consumption potential and focus on luxury.

The winners in Gen X spending will be clear, according to Lindy Firstenberg, a consultant at AlixPartners.

“Ulta is going to win because they’ve doubled down on health, and they’re very focused on menopause products,” Firstenberg said.

Although Sephora has been marketing outside of minority groups, Firstenberg said it is still emerging as a Gen X brand “hotspot,” along with Bluemercury. Key said he has been investing in curation and one-on-one with customers.

Members of Gen X, who grew up with salespeople working at counters in supermarkets, invest in experience and product. Firstenberg said the importance of experienced partners is 23% higher for Gen X than Gen Z.

Brands that focus on meeting Gen X where they are instead of chasing younger generations, will protect their spending power, Firstenberg added.

“That’s what Gen X wants: They want the best products, they want education, they want that top talent and they want that service,” he said.

Kirti Tewani, a member of Gen X and a content creator who focuses on promoting beauty and health for her team, said she has seen a growing interest in investing in products that work to slow down or prevent progressive aging.

That generation posed a huge “untapped” market when we started seeing more attention to it about two years ago.

“Gen X has been a generation that has gone through many problems in its life so that we are now in a position to be financially independent, the children are grown up and now we have time to take care of ourselves,” he said. “So we take care of ourselves from the inside out.”

Tewani said she has seen Gen X in particular focus on products that boast long-term results and target areas such as hyperpigmentation, dry skin and large pores. They also pair those products with a lifestyle focused on health, he added, focusing on diet, exercise and sleep.

The generation is also looking for cleaner ingredients, according to Tewani, which coincides with a bigger push for simpler designs in the beauty industry.

“I think the brands know this is coming,” said Tewani. “Now, many brands are jumping on the bandwagon because they understand where the spending markets are, and Gen X is definitely filling that gap.”

And Gen X’s age also means that its beauty budget extends beyond the mainstream.

According to AlixPartners’ Firstenberg, people in that age range are likely to be in the so-called “sandwich generation,” meaning they buy beauty products for both parents and children, which contributes to high spending.

It’s also not a generation focused on innovation or flashy marketing and is instead looking for products that show proven results.

Gen X spending power is about 25% higher than the national average, he added.

“We don’t just see that they have this power, but they do it,” he said. “They’re going to keep this generational currency for at least the next eight years.”