In the 2010s, tech-savviness was a valued quality for whip-smart members of society. A decade later, it’s a necessary skill to survive in a world that continues to propel its evolution in sophistication, ease, convenience and cost-efficiency, on all fronts.

With longevity fueling cultural fixtures like artificial intelligence (AI), the beauty business is the core of this transformation. Consequently, technology has played an integral role in accelerating beauty in the 2020s. Per new data from NielsenIQ, in 2023, AI in beauty was valued at roughly $3.27 billion and is projected to reach $8.1 billion by 2028. In the age of the influencer, the firm found the global influencer market in beauty is expected to reach $33 billion this year. To that end, ecommerce sales—which comprised 33% of beauty sales in 2020—now make up nearly half of sales, at 46%. And businesses owe a debt of gratitude to TikTok. NielsenIQ found TikTok Shop rose to be the eighth largest e-commerce health and beauty retailer in the US, with earnings of $1 billion in beauty sales.

What’s more, Chat Generative Pre-Trained Transformer (ChatGPT) is playing a critical role in how beauty consumers are using the platform to obtain personalized recommendations and detailed tutorials to streamline the product discovery process. Analysts say shoppers are generating more than 1 billion web searches per week on the language model, and that a collaboration with Shopify spells massive potential to drive further growth in the category.

Weighing the Pros and Cons of AI

Despite its fast generation of information in a hyper-curious world’s constant quest for answers, like most human relationships, consumers’ relationship with AI is complicated. In fact, analysts say consumers are displaying negative attitudes towards AI with 75% fearing job elimination; 69% worried about the spread of misinformation; and 65% concerned over its encouragement of cheating at work or school. However, consumers continue to apply critical thinking skills to guide their judgement. Brands and employers alike are integrating AI into their business models. Analysts say 68% of people polled said AI improved several areas of life, including health and education, while another 68% appreciated the personalization of online shopping. Another 63% said it allowed for creativity, and 60% said it improved productivity.

With internet research fueling purchasing decisions, information overload can have its downside. Endless options can leave overwhelmed consumers drawing a blank when making purchasing decisions. Analysts say Millennials are the most stumped (at 48%) out of all the adult age groups, inclusive of Gen X (34%), Zoomers (Gen Z) (46%) and Boomers (20%). These statistics come as no surprise as the tech-savvy generations – 40% of consumers – are likely to leverage AI to automate and speed up their everyday shopping decisions. Geographically, NielsenIQ says that younger consumers in Asia Pacific and Middle East Africa regions are open to embracing AI, while Western and elder consumers remain more old-fashioned and skeptical. AI is having such impact on the tech generations that as many as 34% of consumers are likely to purchase a product that have merely examined or experienced through Augmented Reality (AR) or Virtual Reality. However skeptical older generations may be, analysts insist AI is something to be embraced as it continues to shape the beauty journey and how beauty is discovered, sampled and sold. Online shopping continues to drive growth for beauty. Per recent data from NielsenIQ’s POD Omnishopper Panel, the total beauty and personal care sales inclusive of in-store and online totaled $122.8 billion, an increase of 9.7% versus a year-ago, and a year-to-date increase of 9.9%. Forty-seven percent of sales are made online and 53% are made in-store.

Key Beauty Channels Generating Growth

Speaking of retail innovation, popular channels including Amazon, Costco, Sephora, Ulta, Walmart and TikTok have experienced positive growth in terms of value versus a year-ago. Amazon is capturing both dollar and unit growth. Buyers increased 9%, trips increased 11% and the value per buyer increased 11%. Sephora is growing the shopper base with a buyer expansion increase of 8%. Ulta is experiencing category expansion with a 28% increase in bath and shower; an 80% increase in deodorant; and a 6% increase in hand and body lotion.

With stars like Paris Hilton introducing cookware and handbag lines at Walmart, the retailer is attracting affluent shoppers whose annual income is over $75,000, per analysts. TikTok – which generated a reported $1.7 billion in beauty sales in the last year – is building trust and loyalty with a 60% increase in value per buyer; a 59% increase in trips; and a 23% increase in order value.

Costco is making a play in beauty with Business Planning and Consolidation sales, which saw a 14% increase versus a year-ago; cosmetics increased 26%; and fragrance increased 104%. Fragrance experienced a three-year growth of 25.1%. With skin care ingredients extending to the entire body, body care dominated in 2025. Brands like Olay and Tree Hut segued into the category. Olay introduced its Super Serum this past year as a body wash and Tree Hut introduced its HydraGlow Body Serum. Color cosmetics also saw a rebound with a 1.2% growth versus a year-ago. Sun care and hair care also saw slight positive growth, at 1% and 1.3%, respectively, with hair growth and scalp health concerns for consumers.