Beauty, Health and Wellness Have Merged Into One Budget Line

Nearly 100% of consumers surveyed now treat beauty, health and wellness as a single budget item, according to a new study from consulting firm AlixPartners — a collapse of what were once three separate spending categories, and a shift that is redrawing competitive lines across retail.

The survey, conducted jointly by AlixPartners and industry group CEW between May and June, sampled 1,000 consumers aged 18 and over, split across gender, age, income brackets and regions. It also polled 127 executives in the beauty, health and wellness industries.

The findings expose a stark gap between what shoppers want and what companies are prepared to deliver. Forty percent of consumers said they want traditional beauty companies to expand their product offerings. At the same time, 42% of executives said they want their companies to stay in their lane.

"What that shows is a fundamental disconnect that consumers are asking for more; they're asking for different, they're asking for a new playbook, and executives are saying, 'No, that's way too scary. That's not going to happen,'" Lindy Firstenberg, co-lead of AlixPartners' beauty, health and wellness practice, told CNBC.

The data shows consumers treat the merged category as fully interchangeable. "What we found in the data is a consumer is just as likely to trade off a night cream for another night cream as a night cream for a personal trainer," Firstenberg said. "Anything in beauty, health and wellness is within the consideration set."

Why executives hesitate

Firstenberg said companies may be reluctant to place big bets that won't pay off within a quarterly earnings cycle. Expansion would require lengthy research and development and consumer profiling.

"They're not willing to look outside of themselves in order to see that broader beauty, health and wellness bucket, which is the exact opposite of consumers," she said.

The consumer side is changing fast. AlixPartners calls the trend the "consumer PhD": shoppers are more knowledgeable about ingredients and are taking a science-backed approach to beauty purchases. Firstenberg said people increasingly rely on other consumers, especially on social media, to judge which products deliver results — not on the brands themselves.

How retailers are responding

Some companies are buying or partnering their way across category lines. In 2022, Gucci partnered with wearable fitness tracker brand Oura on a specially designed ring. Last month, Procter & Gamble agreed to acquire supplements brand Thorne for $3.8 billion to grow its health business.

Others are remerchandising. Ulta Beauty has launched in-store wellness boutiques featuring supplements and skin and hair serums. Target launched the Target Beauty Studio on Sept. 10 after phasing out its shop-in-shop partnership with Ulta in August. Sephora now has a dedicated wellness and skincare section on its website.

Walmart has spent the past few years investing in varied product assortments, leaning into both entry-level price points and premium brands, said Silvia Kawas, who leads the consumables business for Walmart U.S.

"Our customers today are actually thinking about solving problems across their health and wellness and beauty journeys more holistically than ever, and so you'll see a lot of blurring of the lines," Kawas told CNBC.

Walmart, which is remodeling many stores, is placing beauty products in high-traffic areas and staffing aisles with associates knowledgeable in beauty and wellness, alongside the expertise of its pharmacists. Kawas said customers are in trial-and-error mode, so mini and single-serve products have performed well.

"We're very intentional about creating this exploration, discovery and navigation in-store and online that gives [customers] confidence in the solutions that they're buying from Walmart," Kawas said.

The spending holds up

Not every player is positioned to win. Pierre Dupreelle, global leader for beauty at Boston Consulting Group, said the industry's "revolution" is producing a "complete reshape," accelerated by the rise of GLP-1 drugs as consumers focus on how health intersects with beauty.

"The brands that consumers are now favoring are extremely efficacious brands that are very focused on science, derm-backed, doctor-backed type of products, so there's a set of brands that are really benefiting from this explosion of the category," Dupreelle said. "The more traditional, more sensible skincare brands, even at the top of the price points, are definitely struggling."

The category is also proving resilient. Even under pressure from high gas prices, rising inflation and global political uncertainty, consumers are more likely to cut spending elsewhere before trimming their beauty, health and wellness budget, Dupreelle said. An August report from market research firm Circana found unit demand in beauty stayed positive through the first half of 2026, with skincare revenue up 8%, helped by interest in whole-body wellness.

For Walmart, the strategy is already showing results: customers are building bigger baskets on their way to the cash register. "That's the advantage, is affordability, access and flexibility to customize and personalize," Kawas said. "The more we do that, the more repeat and loyalty we will get out of them because we're consistent in our offering."