Luxury, as well as fashion, is a concept that evolves over time to adapt to preferences and the new social and economic conditions of society. The opulence, lavishness, magnificence and pomposity of cosmetic luxury that we have seen in recent years have evolved into a new concept in these times of pandemic, inflation and war that is now based on minimalism, ecological awareness, humanism, wellness and health.
The luxury category was hit hard by the pandemic, but it is precisely these new concepts that represent a great market and innovation opportunity. Statistics indicate that luxury is one of the most resilient industries and is also one of the fastest recovering after a crisis.
The portal redskins101.com indicates that the global luxury cosmetics market was worth U$ 45.1 billion in 2020 and is expected to grow to U$ 58.7 in 2030, registering a CAGR of 3% in this period. The numbers indicate that this market has started to recover and that is why we see very interesting trends:
Hunger for luxury
Although it is true that the pandemic has promoted contactless and storeless concepts in which consumers seek to avoid as much contact as possible, luxury brands are creating new unforgettable experiences in retail to recover the influx of customers. The goal, as mentioned by Mintel in a recent report, is that brands want to convey a sense of exclusivity and new sensory experiences that are difficult to replicate online or through catalogues.
In Asia for example, many luxury brands in different categories are creating cafes so that consumers can better interact. The goal is to perceive brands in new ways. Socialization is the new black.
We already know that upcycling is the big trend in cosmetics for this year and it is a current that luxury concepts are knowing how to take advantage of. We now see a trend in linking upcycling technologies with benefits of well-being, health, comfort, happiness and luxury. Now the consumers do not want to own, they want to experience.
This has been a major driver for luxury brands in the last two years. For example, there are companies that provide manual and artisan restoration services for luxury products, as is the case with leather products. Brands are adjusting their efforts to communicate with the more environmentally conscious shopper. The market is now more than ever more sensitive to issues related to sustainability and ethics. The new luxury marketing is now more purpose-driven, more authentic and relevant.
Definitely, one of the most exciting trends where the luxury category can innovate. Beauty is a universal right and inclusion in cosmetics is a whole world of possibilities. There are many segments where we can see very interesting examples. This year saw the launch of a brand specializing in transgender period care products, which addresses the lack of inclusion in this category.
In February we saw how Victoria’s Secret launched an inclusive campaign with its first model with Down Syndrome. On the other hand, Vogue published an interesting article in April indicating that ageless creams are the future of inclusive cosmetics. Pinterest recently announced the launch of a new inclusive feature that allows you to find the best hairstyles based on hair type. Now users of the platform will be able to refine their searches and choose between protective, frizzy, curly, wavy, straight and bald/shaved styles. Inclusion is definitely a driver of innovation for the luxury category.
The Journal of Business Research published the article “Redefining mass luxury consumption in the post-COVID era” by author Zi Wang in April, in which it indicates that the concept of “new luxury” has challenged the conventional marketing of luxury goods such as prestigious, which has led to a further expansion of the meaning of mass luxury. One of the conclusions that the article mentions is that luxury is now focused on the psychological well-being of customers.
The luxe.digital portal indicates that websites and mobile applications are the new dominant sales channels for most luxury brands. The companies have done a great job of improving the online user experience and building trust by assuring customers that returns and exchanges can go smoothly. Projections indicate that 30% of all luxury sales will be online by 2025.
Millennials % Gen Z
The portal also indicates that these segments drive the growth of luxury at an accelerated rate. Together, these younger generations of affluent consumers will represent 70% of the luxury market by 2025 and will contribute 130% of the growth in the luxury market. However, they are still neglected by many luxury brands and represent a huge opportunity for the cosmetics industry. On the other hand, 42.5% of global luxury sales will be made by Chinese consumers by 2025.
Non-fungible tokens were one of the most popular terms in 2021. The Collins dictionary chose this term as the word of the year. Morgan Stanley analysts expect the luxury metaverse and NFT market to reach $56 trillion by 2030.
Oscar de la Renta said: “Luxury for me is not having expensive things, but a way of life where you appreciate everything you have” and this definition is aligned with our current consumers, since they values experiences and customs to a greater degree, creating their own concept of luxury according to the changing environment.
On the other hand, Coco Chanel used to say: “Luxury is a necessity when the need ends” and definitely after a time of restrictions, isolation and needs, the consumer reinvents himself to create luxury concepts that evolve into different experiences, creating new spaces that differentiate it. To conclude Carolina Herrera tells us “Luxury will always exist, no matter what happens in this world”, corroborating as well as in each stage of time it is a concept that remains valid and reinvents itself according to the context.
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