Beautiful Thinking.
Two forces are rising – the thrill of luxury and the clarity of value – and consumers are moving decisively towards one or the other.
Everything in the middle is starting to feel less compelling, less necessary, and ultimately less defensible. As expectations heighten and spending becomes more intentional, the beauty, wellness and consumer healthcare industries are being reshaped by consumers who want either the very best or the most hardworking – with the £££s being the signifier – and nothing that sits vaguely in between.
Prestige beauty has dominated conversation in the industry in recent years, as consumers become increasingly savvy about the ingredients and formulations that not only connect them to the most talked-about products, but genuinely support their ambitions around healthy ageing and longevity. This has, to date, spurred growth in the middle-priced beauty, skincare, health and wellness spaces as brands rush to meet the demand of savvy shoppers seeking the best which brands have to offer at accessible prices. But this dominance is falling away, as the realities of global economies meet the demands of consumers whose power and priorities are shifting.
The concept of prestige is moving to the backburner, as a drive for value is pulling consumers back to the purer and overall lower-priced mass market. According to a Circana report on the first half of 2025, “the U.S. prestige beauty market grew by 2% to $16 billion, while sales at mass merchants increased 4% to $34.6 billion.”
Overall, industry growth remains – but it is slowing. So when we understand the routes showing the slowest growth, it signals where brands can – and must – direct their focus.
Years of uncertainty, volatility and financial pressure have pushed consumers to scrutinise every purchase they make. The ‘lipstick effect’ still lingers, with small beauty treats offering moments of joy and escape, but even these are chosen more deliberately. Consumers are now using their heightened savviness and knowledge to ensure that their more limited disposable income goes only to products that deliver value on every level. They want to feel confident that every penny spent is based on proven results. And with that, we’re seeing value brands deliver stronger efficacy at these lower price points, to secure the loyalty of consumers who champion value above all else. Circana reports that in the first half of 2025 “mass skincare sales rose 4% while prestige skincare dollar sales declined 1%”, demonstrating how value-led efficacy is outperforming mid-tier offerings.
On the other end of the spectrum, we’re seeing a resilient luxury market. Affluent consumers simply don’t feel the weight of turbulent markets on their spending habits because they’re less affected by macroeconomic turbulence. As The Business Research Company notes, the luxury skincare category grew “8.6% year-on-year between 2024 and 2025”, signalling continued appetite for ultra-premium products despite economic headwinds.
And it’s the rise of the mass market and the renewed trust in value-led efficacy that is giving the luxury space the legs to run with the ultra-aspirational – the gold standard of the most indulgent and realistically, unattainable. The perseverance of dupe culture and the growing trust of value brands that offer heightened levels of efficacy means that the idea of accessible luxury is losing its appeal.
What is the need for luxury brands to try and fight back for relevance in this space when they have the chance to showcase their core brand specialisms and beloved USPs in products which are more akin to objets d’art than pure function? Impeccable storytelling through beautiful materials and design? These are collectors items, pieces of theatre in product design, where a sense of acquiring an heirloom gives consumers with the spending capabilities the confidence to make this level of investment. For those who might be horrified by the price of these products? Well, it simply hasn’t been designed by the brand for them, and so the shock and horror is irrelevant.
Having said that, it isn’t necessarily that a consumer who predominantly buys value products would never purchase a luxury item. If anything, the dichotomy of luxury vs value sees consumers make 90% of their beauty, skincare, health and wellness purchases in the lower price point space – but every now and then, they will put their savings to work and indulge in a singular luxury purchase that gives them the rush of a treat. Again, prestige falls by the wayside of these luxurious one-off splurges.
The art will be identifying the product categories where value reigns supreme – or where the investment is worth it – and determining then which direction your brand should take.
Sectors such as skincare and fragrance can choose to enter down either lane. Consumers on either side of the spectrum would not be horrified by a serum that costs less than £20 or in the region of the hundreds, and we see just as many scented mists hit the market as we do ultra luxurious perfumes housed in packaging that could sit proudly on a pedestal in your home.
However, one of the most interesting spaces we’re seeing this choice of direction in product categories go is the consumer healthcare space. An arena which is no longer designated to the dry essentials and the branding to match, life is being injected into healthcare branding. The rise of premium problem-solvers – from advanced sleep supplements to clinically-validated gut health innovations – sits in sharp contrast to the booming demand for low-cost essentials and own-label OTC basics. According to Kline’s OTC market tracking, premium CHC products centred around “scientifically supported formulations and targeted delivery formats” are growing faster than mid-tier OTC, while value-led own-label continues to accelerate in unit sales.
Consumers now approach healthcare with the same heightened discernment they bring to beauty, using reviews, research and trusted voices to validate efficacy before they spend. And this is where we see the same split re-emerge; some invest in advanced technologies, precise dosing formats, or enhanced bioavailability, while others prioritise affordability, simplicity and habitual daily use.
This dynamic mirrors beauty’s bifurcation – premium CHC brands leverage scientific credibility, patented actives and pharma-grade positioning, while value CHC brands win on cost-effectiveness, clarity, and essentialism. McKinsey’s Future of Wellness report highlights that consumers are “willing to trade up for proven efficacy” in areas like sleep, gut health and stress management – but remain highly price-sensitive in daily essentials such as pain relief or vitamins, reinforcing the dual-speed nature of the category.
Ultimately it comes down to the resilience of the consumer. There are those who are fundamentally affected by the headwinds of political moves and economic downturns – and those who remain simply untouched. They might be adapting elements of their lives to major global developments but their day-to-day, week-by-week, month-to-month spending remains largely untouched. And with their resilience comes the same expectations that value-led consumers have from the mass-market sector – both want innovation, they want access to the latest breakthrough ingredients and solutions that feel genuinely future-focused, whether at £5 or £500.
The polarisation we’re seeing across beauty, wellness and healthcare isn’t chaos – it’s clarity. Consumers know exactly what they’re looking for, and they’re rewarding brands that stand for something meaningful. Luxury now has permission to be more exquisite, more imaginative, more unapologetically indulgent than ever. Value, meanwhile, has permission to be sharper, smarter and more efficacious.
The brands that will struggle are the ones attempting to dilute their proposition across tiers, trying to appeal to everyone and convincing no one. In 2026, decisiveness will be the differentiator.
Commit to being a value powerhouse or a luxury leader. Clarity of intent wins; hedging your bets doesn’t.
Consumers are rewarding efficacy that’s evidenced – not implied. Clinical claims, credible testing and transparent sourcing matter across beauty, wellness and CHC.
Whether you create a £5 essential or a £500 statement piece, your product should reflect who the consumer wants to become through using it – calm and confident, or elevated and empowered.
Luxury brands should amplify narrative, craft, materiality and emotion. Value brands should win through simplicity, clarity, and functional brilliance.
Premium CHC should lean into scientific credibility, targeted delivery and breakthrough actives. Value CHC should champion trust, utility and everyday affordability.
Mixed signals confuse a buyer who’s more decisive than ever. Your look, your tone, your experience – all must reflect your chosen lane.
