How Are Consumers Spending in 2025?

2025 has been a big year for founder-led beauty brands. Huda Kattan bought back Huda Beauty, Selena Gomez eyed — and then paused — the sale of Rare Beauty and Hailey Bieber sold Rhode for a staggering $1 billion. But these aren’t the only companies witnessing ownership shifts. L’Oréal has further expanded its extended beauty offering this year, adding Medik8 and Color Wow to its portfolio — both of which were announced in June 2025.

Beauty companies are witnessing mixed financial results. Companies such as Puig are boasting a strong performance as a result of their fragrance business, while others, like The Estée Lauder Companies, are still facing market headwinds, although performing better than analyst predictions. Trade tensions and tariff uncertainty unravelling to reveal price increases continue to impact brands and consumers alike, with consumers showing signs of spending sensitivity. With an uncertain year awaiting the beauty industry, adaptability will shape what comes next for beauty brands.

In this chapter, we review what consumers think of the 30 beauty brands covered by the Vogue Business Beauty Index. We delve into perceptions of product suitability and efficacy, as well as perceptions of the brand from uniqueness to its power in championing diversity in its marketing campaigns. We further unpack the purchase intent of consumers alongside the power of word of mouth with a survey of more than 2,500 Vogue and GQ readers across China, the Middle East, the US and Europe (UK, France and Italy).

Consumer sentiment’s 2025 class

The Ordinary leads the consumer sentiment pillar for the third year in a row, bolstered by consumer perceptions of its efficacy and values, alongside strong purchase rates. Cerave and La Roche-Posay drop to third and fourth position, respectively, as both see their consumer trust wane. Nars, by contrast, has gained consumer trust over the past year, as consumers believe the brand offers products for a wide range of skin types and tones.

Within the top five, Kiehl’s is the biggest riser this year, ascending the ranking by three positions to second place. Improved perception of quality and rising purchase intent helped drive its performance, the growth of which reflects revenue increases as outlined in L’Oréal’s 2024 annual report. Known for its portfolio of hero products — such as its Midnight Recovery Concentrate — Kiehl’s has long risked becoming a stagnant legacy brand. Yet the brand’s strategy is seeing renewed enthusiasm among new consumer segments. Male purchase intent of the brand, in particular, has risen from 47 per cent in 2024 to 61 per cent in 2025. L’Oréal itself acknowledges how the brand’s presence on Amazon, where it ranked third in luxury skincare, has bolstered its appeal to male consumers. The brand’s The White Lotus collaboration was another move bringing it closer to the cultural conversation.

Beyond the top five, Rare Beauty and Byredo were the biggest risers, both climbing the consumer ranking by four positions to 13th and 23rd place, respectively. While both are smaller players in the consumer sentiment pillar, they have each seen increases in awareness and purchase intent. Byredo has also made strides in its quality and brand association perception, with consumers more impressed with its packaging and “uniqueness” than they were in last year’s Beauty Index. Following the exit of founder Ben Gorham in June 2025 — three years after its acquisition by Puig — it remains to be seen whether Byredo can sustain its current momentum and brand equity that set it apart.

Proving worth in a cautious market

Ongoing tariff wars are causing pricing concerns across nearly every industry. Tariff rates in China have settled on an agreed 55 per cent as of 11 June. As of 8 July 2025, South Korea and Japan are both set to face 25 per cent tariffs, while as of 15 July, the EU is set to face tariffs of 30 per cent. France and South Korea were the two largest exporters of skincare in 2024, while China and Japan have long been embedded in the beauty supply chain.

As a result, price rises are inevitable. Elf Beauty raised its prices by $1 per SKU in May 2025, while Saie announced price increases of between $1 and $4 across selected products in June 2025, citing tariffs. Elf saw an increase in the perception of its value for money despite its price hikes. Sixty-two per cent of beauty consumers are concerned about the impact of trade tensions and tariffs, with this particularly pronounced in Italy (76 per cent) and France (71 per cent). This concern is despite the latest EU tariff rates being announced after the research concluded. For some beauty consumers, this concern translates into a reduction in spending. Over a third (35 per cent) of consumers will shop less for beauty products if the price of goods rises, while 68 per cent will wait to conduct their shopping during sales and promotional periods.

The majority of beauty brands operate in the global supply chain and are therefore impacted by these tariff changes. But are some brands more at risk than others?

Against this challenging backdrop, 31 per cent of consumers are looking to buy from less expensive brands if prices rise. Consumers consider The Ordinary, Beauty of Joseon, Elf, Cerave and Byoma to be the best value for money brands within the index. In theory, these brands stand to better weather the shifting tides from a more economically conscious landscape as consumers previously shopping in premium and luxury sectors seek ways to cut costs.

The challenge for these affordable brands is their operating margins, which will inevitably be much lower than those of brands operating at a higher price point. With smaller margins comes a reduced ability to absorb costs, although even some large conglomerates, which, in theory, have more leeway on pricing, aren’t planning to absorb. Shiseido, for example, has also pre-empted price rises linked to tariffs. As 31 per cent of consumers say they’ll shop at less expensive brands if their preferred brands raise prices, there is no guarantee that an individual brand will benefit from raising prices, and brands run the risk of alienating existing consumers. Value, therefore, becomes an essential conversation at all beauty price points, with a need to communicate not just cost, but a product’s worth.

For more affordable products, tangible effects are the ones that add value. In skincare ingredients, quality and lab-tested efficacy can all convey a sense of product worth. In cosmetics, long-lasting formulas and increased functionality — such as the addition of active ingredients — can add value. Across fragrance and bodycare, it’s the sensorial element that makes a product feel more luxurious than its price point. Elements such as functional fragrance with wellness benefits, “cleaner” formulations and new formats can further boost the fragrance category. For luxury brands, it’s more intangible — heritage storytelling, aesthetic packaging and the sensory experience all play a role. However, in this price-conscious environment, price-tag justification will set brands apart. Strategic marketing will become key to amplifying both the benefits of products and the brand’s world. It may be an era of supply chain uncertainty, but it can also provide brands with an opportunity to be explicitly transparent with consumers.

Gen Z wallets shrink

While trade tensions and consumer concerns point to an uncertain future for beauty, spending is currently undeterred, with products being purchased at the same rate as in 2024. Almost all consumers surveyed (96 per cent) purchased at least one skincare product, such as a moisturiser or serum, in the past six months, while 83 per cent purchased facial colour cosmetics such as foundation or blusher, both unchanged from last year. The resilience of the beauty industry during times of economic strife is often put down to the lipstick effect, in which consumers treat themselves to small luxuries during tough times. Notably, Gen Z is an exception to this resilience. So, what happens when the next generation of consumers stops consuming?

Gen Z is best captured in our research by the 18-24 cohort. Compared to older groups, this generation is less likely to purchase lip products, fragrances and eye cosmetics. More importantly, in purchases of nearly all categories consumers were asked about, declines ranged from -15 per cent for lipsticks to -3 per cent for fragrances. In comparison, one of the only growth categories, skincare, saw a 3 per cent increase in the last year, with 98 per cent of Gen Z purchasing at least one skincare product in the past six months. With this generation at the early stages of their careers or in education, this general caution reflects wider uncertainty around employment and financial security.

Compared to its generational counterparts, Gen Z is more likely to research brand information through social media, product reviews and articles. There is also a rising trend among this generation of utilising generative AI, such as ChatGPT, to offer product and regime advice. As a result, these consumers are armed with a wealth of knowledge, whether factual or not. As this cohort becomes more discerning, it’s worth looking at the brands that Gen Z is purchasing from.

Beauty of Joseon, The Ordinary, Charlotte Tilbury, Milk Makeup and Rare Beauty emerge as the top five brands that 18 to 24-year-old consumers plan to purchase in the coming months. At first glance, these brands appear to have little in common. They span different price points, categories and founding roots — from K-beauty to celebrity-backed brands. What these five brands do share is their strategic similarities in key areas that matter to consumers. In general, these brands are known to deliver strong value for money, product launches and personalisation, alongside strong storytelling and trustworthiness. At the time of writing, The Ordinary’s skincare products range from $6.40 for a niacinamide powder to $41.80 for a set of four “age support” products. Milk Makeup first launched its viral Jelly tint blush and lip stains in February 2024, and has since released further shades. Meanwhile, Charlotte Tilbury and Rare Beauty are standouts in their storytelling.

In many cases, this generation is less set on their own roster of hero products and trusted brands. Therefore, winning over Gen Z consumers becomes anyone’s game. Strategically, brands need to ensure that the price and product are right, while also staying at the forefront of this generation’s extensive research process. Those that resonate most with Gen Z distinctly showcase clear results, transparent pricing, and a compelling brand narrative.

Case study: Beauty of Joseon’s cult following

Gen Z favourite Beauty of Joseon entered the Vogue Business Beauty Index in 2025, ranking in 18th place in consumer sentiment. What sets the brand apart is how quickly it’s built its reputation despite a smaller footprint than most index brands. Founded in 2019 in South Korea, the brand has only recently begun to make its mark on Western markets. It launched in UK retailer Boots in June 2024, expanding into Sephora in the US in July 2025.

Despite a lower awareness than the average index brand at 31 per cent — bolstered by a stronger presence in China and the Middle East — the brand boasts a dedicated following. Beauty of Joseon is the second most likely brand beauty consumers expect to purchase in the coming months, as well as being the second most recommended brand, ranking behind The Ordinary in both areas.

Beauty of Joseon utilises herbal ingredients rooted in traditional Korean medicine (hanbang) alongside scientifically backed actives. For consumers, this is a winning combination. In a score out of 10, consumers rate Beauty of Joseon 7.8 for high-quality ingredients, sitting just behind the top scorer, La Mer. It is also considered the most efficacious brand in the index — overtaking The Ordinary — as well as having products that suit consumers’ skin types.

In a score out of 10, consumers rate Beauty of Joseon 7.8 for high-quality ingredients.

Photos: Courtesy of Beauty of Joseon

The brand’s cult-like status is reflected in one key statistic: it comes top for “making consumers feel in the know about beauty”. As Beauty of Joseon continues its expansion strategy and as K-beauty enjoys its resurgence, the awareness and scale of the brand will likely grow. As the brand further enters the mainstream, time will tell if it can maintain its insider appeal and high trust levels, while ongoing tariff wars could impact its growth in the US.

Tarang Amin, CEO of Elf Beauty.

Photo: Courtesy of Elf Beauty

Expert interview: Tarang Amin

CEO | Elf Beauty

How do you see the current economic environment impacting consumer behaviour?

Consumers are being more intentional with their spending, prioritising both value and values. This means offering better-than-prestige quality at an accessible price, driving innovation through a diverse team that reflects the community we serve, and showing up in culture as an entertainment company that happens to sell beauty.

Elf s acquisition of Rhode is perhaps the biggest beauty story of the year. What makes Rhode the right fit for Elf?

We are building a different kind of company. The acquisition of Rhode is a unique opportunity to bring together two like-minded disruptors who share the same vision of delivering high-quality innovation to highly engaged communities. Rhode has built a business that has reached $212 million within three years of launching with only 10 products available direct-to-consumer (DTC). We’re excited to welcome Rhode into the Elf Beauty family and to continue fuelling founder Hailey Bieber’s vision. Given the strong organic growth of our existing portfolio of brands, we have a very high bar for M&A. We look for like-minded disruptors who demonstrate breakthrough performance, incredible growth potential and who further diversify Elf Beauty with a distinct yet complementary brand.

Hailey Bieber attends the Rhode UK launch party.

Photo: Dave Benett via Getty Images

Trade wars continue to cause uncertainty in the supply chains of most industries — beauty included. How do you see these changes impacting the wider beauty industry?

Our tariff mitigation is focused on three key sectors: pricing, supply chain optimisation and business diversification. Brands that will stay ahead during these macroeconomic challenges are agile, pivot quickly when necessary, and are transparent with their communities. We recently shared with our community that we are implementing a $1 price increase across our product assortment globally, effective 1 August. Seventy-five per cent of our products will continue to be priced at $10 or under. It was important to share our plan with our community in advance to give the context that pricing is one of several levers we are pulling to respond to the current economic climate while continuing to make the best of beauty accessible to every eye, lip and face.

Key takeaways:

• Cautious concerns. Rising prices amid tariffs make for a more cautious beauty consumer. Communicating product value can help as consumers shift their beauty habits and brand preferences.
• Activating Gen Z. As Gen Z wallets shrink, these consumers become more discerning in their beauty purchases. Yet, less settled on brand and product preference than older consumers, Gen Z’s loyalty remains wide open.
• Maintaining devotion. Cult brands win on the backs of their niche and ‘cool’ statuses. Ensuring long-lasting devotion is trickier as these brands become mainstream. Scientific credibility and a unique offering can help maintain cult status among a wider audience.