Wal-Mart develop prestige beauty line with Hard Candy cosmetics
The color cosmetics range will appear in 3,000 of the discount retailer’s stores in September with an international rollout planned for early next year.
According to Wal-Mart, the cosmetics brand was a natural choice for the foundation of the developing prestige beauty line, as it has a strong reputation with good growth opportunities.
“Hard Candy is a legacy brand with lots of equity,” said Wal-Mart spokesperson Caren Epstein.
The Arkansas-headquartered company has confirmed the search for new high end beauty and cosmetics brands is on.
A number of analysts have interpreted this as an attempt by the company to cling on to the new customers it has won through the recession.
Wal-Mart, like many other discount retailers, is in a stronger position than the department store as consumers trade down and look for cheaper products.
“Wal-Mart is ideally positioned for the recession and we have picked up many new clients,” said Epstein.
However, it is unclear as to whether these new customers will stay loyal to the retailer when they are no longer forced to go for the cheapest option.
Changes could be more than cyclical
A recent Fitch Rating report suggested that the changes seen in consumer’s buying patterns may be more than just cyclical.
The financial information service highlighted that the market had seen a significant change in consumer buying patterns, resulting in a weakening luxury market and a stronger mass market.
“Although cyclicality is an obvious reason for the decline in demand for luxury products, as consumers trade down for a short time period before trading up again when economic conditions improve, there are also arguments for a structural shift in consumer behavior,” Fitch Ratings stated.
“This is because mass market products are increasingly being perceived as offering similar benefits to luxury care products at much lower price points.”