Adapting to a shifting market: Strategies for luxury beauty stakeholders

Adapting to a shifting market Strategies for luxury beauty stakeholders

According to a recent Mintel report, “wealthy consumers comprise a large base of the luxury market, but a younger, less affluent and more diverse generation is emerging, requiring brands to be agile,” detailed Brittany Steiger, Senior Analyst, US Retail and eCommerce Reports at Mintel. With “44% of the general population reporting that they don’t have a reason to buy luxury products/services,” according to the report, beauty brands in the luxury sector, and the cosmetics and personal care product manufacturers and suppliers behind them, need to remain flexible and adaptable to evolving consumer purchasing habits and how beauty buyers are demanding luxury beauty product options.

We spoke to Diane Kim, Global Brand President of bareMinerals, BUXOM, and Laura Mercier for her insights into how cosmetics and personal care manufacturers, suppliers, and brands can adapt to the changing needs of luxury beauty buyers and remain profitable in the current US market.

Understanding the current luxury beauty market

“It’s an extremely competitive environment for manufacturers and suppliers” today, Kim began. For cosmetics and personal care product manufacturers and suppliers, she described, the current luxury beauty market share is a “situation in which they have to strike the right balance of managing costs and inventory while addressing consumers who indicate that they intend to splurge on beauty – yet still seek high-quality products at a sharp price point.”

She explained that industry stakeholders in this space face challenges, including “economic turbulence, geopolitical instability, and inflation.” However, despite these challenges, “beauty remains a resilient industry with strong opportunities, even within the luxury beauty sector for skin care, fragrance, color cosmetics, and hair care,” said Kim. She illustrated, “McKinsey has estimated that luxury beauty has the potential to grow to nearly $40 billion by 2027, 20 percent annually over the next four years.”

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