Beauty Retailers Surge as DTC Brands Struggle in 2025.
Mass retailers and curated platforms are outpacing DTC-first beauty brands.
The DTC Slowdown Has Arrived
Direct-to-consumer beauty, once the model everyone tried to copy, is now posting the weakest results of any major channel. Consumer Edge data shows US DTC Beauty Products spend down 10% year-to-date, while UK DTC services lag overall consumer spend.
The promise of endless growth through digital-first distribution has run into structural limits: paid acquisition costs are crushing margins, consumer feeds are oversaturated with lookalike brands, and the pandemic-era “click to buy skincare” boom has cooled.
Direct-to-consumer still functions as a channel, but growth now depends on hybrid distribution that blends retail ecosystems with digital storytelling.
Retail’s New Power Position
Retailers are showing that scale plus curation can outperform.
Sephora continues to convert Gen Z through prestige exclusives and digital-to-store integration, while Ulta finished fiscal 2024 at $11.3 billion in revenue, a modest but positive gain over 2023. In the UK, Space NK,
AllBeauty.com, and JustMyLook have outperformed total market growth by positioning themselves as gateways to newness. Sephora’s UK relaunch is paying off by replicating the same mix of loyalty, app-driven discovery, and prestige storytelling that built its US dominance.
Retail has shifted from distribution utility to active brand-builder.
Mass Retailers Reframe Value
Mass retailers are also stepping up.
Target reported $3.4 billion in Q2 2025 beauty sales, essentially flat year-on-year, but its scale shows how mass players are cementing themselves as credible destinations for skincare and cosmetics.
Amazon and Walmart have expanded assortments and partnerships, turning beauty aisles into battlegrounds for price-sensitive shoppers.
Consumers treat mass retailers as reliable platforms for beauty, integrating purchases into broader shopping missions rather than relegating them to occasional fallback buys.
Why Legacy Brands Still Matter
The success of heritage names like Elizabeth Arden, Laura Geller, and Tarte proves that credibility paired with modern activation can still drive growth.
Arden leaned on digital replatforming, Geller resonated with women over 40 through pro-aging campaigns, and Tarte engineered seasonal influencer tie-ins that kept its products in rotation.
Their trajectories illustrate that retailer alignment and cultural relevance, not novelty alone, determine staying power in today’s beauty economy.
Bottom Line
2025 is the year the pendulum swung back. DTC-only growth has slowed, while retailers, from Sephora and Ulta to Walmart and Amazon, are consolidating power by delivering discovery, loyalty, and value at scale.
The strategic play for beauty brands is hybrid: anchor in retail platforms for reach and trust, and use DTC selectively for deep storytelling and community.
The market has shifted, and the platforms now hold the power.
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