The luxury goods market has changed significantly in the last thirty years in response to contemporary consumers and pressure from competitive retail. The industry began to adopt promotional strategies to disseminate and multiply sales of their brands. Luxury is no longer unique and a privilege of a few but it still makes its consumers feel special and proud. Big luxury brands are now available to any consumer who wants to pay for them. It is a worldwide phenomenon of popularized luxury (some authors call it democratic luxury) that relies upon credit. In Brazil in particular, this behavior is even more common due to the ability Brazilian consumers have to pay in installments using their credit cards. It is not unusual for Brazilian consumers to split a purchase into three or more installments.
As an example, the French luxury brand Lancôme’s Brazilian website offers customers the possibility of payment in 12 monthly installments on their credit cards. As a consequence, the site ended 2009 with an average expenditure of BRL 300.00 from their five thousand regular customers. You do the math.
Luxury for the lower classes? Why not? In the past demand was repressed, limiting purchasing power; what new consumers aspire to now is the possibility of purchasing what they could not before. In recent years, the Brazilian market has had new contact with a class of products known as ‘masstige’, which are retail (mass market) products but with a few ‘prestige’ refinements. Thus, at least in the Hair Care market – still the strongest market in Brazil, prices have risen up to margins once unimaginable at the beginning of this century. People never imagined themselves paying more than BRL 9.00 for a retail shampoo in 2002. These days it is hard not to question quality of those products sold below that price. In any case, we still buy because we are triers and bargainers by nature.
In Brazil and elsewhere, the fact is that cosmetic industry has remained somehow an exotic luxury, the exclusive benefits they bring, the uniqueness of the ingredients and their original features. Examples may be found in the products of UK brand Body Food which are composed of at least 99% natural ingredients, and are preservative free. There are also products that exist that contain gold, caviar, pearl powder, black seaweed, bee venom and even snail secretion, offered by widespread brands such as Kérastase, Guerlain, Givenchy, Shiseido, and others.
Be like Jessie J and forget about price tag! Luxury has nothing to do with high prices. This is the most outdated stereotype of luxury. High prices are a mere consequence of the product concept itself, justified by the presence of unique ingredients in most cases.
In summary, what we observe is that luxury cosmetics are available to those consumers who wish for them. In Brazil, such access is even easier thanks to credit offered and the possibility of paying in installments. So each season we are introduced to more and more products with sometimes unimaginable ingredients, which claim unique and even revolutionary benefits. If a dermatologist recommends the product, then the consumer acceptance is even higher.
Gustavo Boaventura is the editor of the blog Cosmética em Foco