Luxury personal goods makers face mass market challenge
with the luxury segment, much is being done to differentiate and
maintain value in goods marketed towards the luxury segment.
A look at the latest launches from the Mintel GNPD indicate that makers of luxury personal goods are having to go the extra mile, sourcing particularly exotic and efficacious ingredients as well as enhancing the packaging design to increase appeal.
"Today, one of the key trends impacting the beauty and industry see mass market producers become ever faster at replicating innovative ideas introduced by luxury cosmetic and beauty manufacturers," a Mintel spokeperson pointed out.
"Indeed, we have already seen everyday products highlighting antioxidants such as white tea and pomegranate, both of which have recently entered the premium end of the market," the spokesperson added.
With the market for every type of luxury good being constantly threatened by cheaper imitations, staying one step ahead of that competition is a necessity. But with some industry observers suggesting that consumer attitudes towards the luxury concept are changing, staying ahead of cheaper rivals might not be the only challenge.
Although leading luxury goods maker LVMH recently announced an 11 per cent jump in its sales during 2005, sales in its cosmetics and fragrance division grew by a relatively weak 7 per cent, suggesting that luxury personal care products makers might be the first to feel the threat of increased competition.
And if luxury goods market researcher Unity Marketing is correct, marketing luxury beauty goods could get even more challenging in the future. Its latest report suggests that, in the US market, consumers are starting to spend more on luxury 'experiences' rather than luxury goods.
Spending on what these experiences, which, as well as spa and beauty services, also includes travel and dining out, almost doubled from an average of $11,632 (€9,495) in 2004 to reach $22,746 in 2005.
Although the market for luxury goods is far more developed in the US than Europe, a direct result of higher spending power, the market is still evolving rapidly, and there are a number of indicators that European consumers will also be looking towards such luxury experiences.
Evidence of this trend does not necessarily spell doom and gloom for the luxury beauty market though, as growth in the beauty salon and spa markets could well spell renewed opportunities.
