Ooh us consumers have become tricky customers of late. One minute, we’re sweeping up bargain-basement toothpaste in Poundland and the next we’re paying $$$ for bespoke designer skin care. Euromonitor has dubbed this ‘middle class retreat’, revealing that the growth of discounters in developed markets is indicative of a swathe of strivers struggling to maintain the economic position they enjoyed for the last half a century. At the same time, premiumization – another Euromonitor megatrend – describes the phenomenon of prioritization where budgets are concerned. In other words, we’re spending where it counts.
“With more products available at more price points than ever before, consumers can spend on the things that matter to them, while cutting back – often significantly – on those that do not,” reads Euromonitor’s Megatrends report. And the figures bear this out – global retail sales of premium beauty overtook those of mass back in 2014, and this trend is only set to continue with the gap forecast to widen through 2021.
Euromonitor warns that customer expectations are still high at both ends of the spectrum. For the mass market, this means that quality, value and longevity are key to winning frugal shoppers’ hearts. And over in the premium sector, well, the price has to be justified. The red tops never tire of stories about copycat fragrances from the likes of Lidl, Marks & Spencer et al, that they claim are perfect smell-a-likes of their designer equivalents, at a fraction of the price, not to mention exposés on the mark-up for prestige cosmetics.
It’s no wonder that the prestige beauty industry has changed tack. You want value? They’ll give you value – and right now, that means customization. And that applies to the product, the service and the marketing.
We’ve been here before, and it didn’t go down well, but times have changed and the latest batch of bespoke beauty is raking it in thanks to the new digital age. Shiseido is betting big on this trend, with two key acquisitions this year, namely MatchCo and Giaran, L’Oréal is looking in to it too – one of the start-ups chosen for its accelerator program this year was personalized skin care purveyor InSitu. And there are bigger plans afoot – as Shisiedo and L’Oréal locked horns over the former’s hire of the latter’s ex-VP of Consumer Products for the Americas. “Whichever company can take the lead in the marketing of customizable skin care products will develop an enormous commercial advantage,” Guive Balooch, Global Vice President at L’Oréal was quoted as saying.
And boy, are cosmetics companies coming up trumps – with AmorePacific set to unveil customized facemasks, Eyeko tailor-making mascara, and custom hair care brand Prose raising US$5.2 million for further R&D, we’re expecting next-level developments in this arena next year. 2018 – expect it to get personal.