Upscale Beauty Soars Where Apparel Falls Flat
Ask anyone on the street if they consider themselves to be a consumer and the answer would be a resounding “Yes.” We’re all consumers, pushed by the desire to attain, project, and compete. Since the dawn of consumerism, there has been an unquenchable human need to obtain goods. However, retail has been in the midst of a few bleak years. One needs to look no further than the American mall to see the shifting landscape of consumerism. Apparel executives are finding that many women are becoming bored with mass retail offerings and the market on a whole is struggling. Despite this, experts have found a silver lining. There is one shopping category that is thriving despite every indication that it shouldn’t be: upscale high-end beauty.
In 2015, luxury beauty retailers Sephora and Ulta saw substantial growth in every sales quarter. A trend that has not happened in the years prior. Estee Lauder, parent company of both Clinique and MAC, adjusted its initial sales forecast as it saw a greater demand from consumers in both skincare and beauty products. Non-traditional players such as apparel brands Topshop and H&M, have gone so far as to devote a great deal of time and money to improving their existing beauty lines. What’s fueling the sudden demand for high-end cosmetics in an economic culture that has been forcing individuals to scrimp and save wherever possible? The short answer: Millenials.
Millennial shoppers, are a retail tour de force, and they’re quickly changing the entire landscape of the beauty market. With rampant access to blogs, YouTube beauty gurus, and even celebrity makeup routines, millennial shoppers think differently about their beauty regimens.. Beauty has become less about the magical act of covering up a few perceived flaws and more about the lifestyle behind a particular look or routine.Women today also have a greater access to tutorials, which allow them to pick up products they would have previously deemed “too complicated” or “difficult to use.”
The prestige beauty category which encompasses makeup, fragrance, and skincare saw a robust seven percent increase in sales in 2015. Market research firm NPD group specified that the makeup subcategory was particularly healthy, surging a massive thirteen percent. Women are not only opting to keep on purchasing cosmetics with their extra budgetary funds, they are choosing quality over quantity. Insiders also suggest that women are choosing items that are “celebrity approved” and products aimed at making one look camera ready.
Some have dubbed this need the “Kim Kardashian” effect. Beauty editors from WGSN to Byrdie have seen lasting and massive trends forecasted by the reality TV star, who uses her Instagram account to focus on her personal makeup techniques and preferred products. Kim is largely credited with instigating the largely replicated contouring trend. A technique that allows an individual to shade their face in a way that pops the cheekbones, slims the jawline, and highlights in order to lift the overall look of the skin. Professional makeup artists have been using these techniques for years, but with Kim’s touch, the tricks went viral. Market research has shown that both contouring and highlighting products were a key driver of growth in makeup sales in 2015.
The rise in sales of upscale and natural beauty products seems to offset how women are spending money on apparel. The true rock stars of the clothing industry as of late have been fast-fashion players such as Forever 21, Zara, and T.J. Maxx. Oddly enough, the major driver in Estee Lauder’s skincare growth has been the Re-Nutriv Ultimate Diamond eye cream, which carries a hefty $250 price tag. Why are women willing to spend $250 on a single jar of eye cream, yet forgo quality when it comes to apparel? Though it may seem contradictory, the answer is frugality.
Since the 2008, economic downturn, women have been forced to maintain a more frugal lifestyle. After eight years of personal financial constraints, many consumers are simple tired of frugality. Despite not having access to a wealth of excess money at the end of each month, women still want to buy nice things, and premium cosmetics prove an entry point into luxury brands. A study on 22,000 global customers conducted by McKinsey & Co, examined trade up and trade down rates (the extent to which consumers moved toward or away from upscale products) in 2015, found that a staggering 20 percent of global shoppers and 16 percent of American shoppers are opting to go high end.
Given the current upward trend, it appears that high end makeup won’t be on the sales decline any time soon.
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