Assessing Key Prospects for Fashion Brands in the Beauty Space

Strategy Briefing

About This Report

Feb 2015

Beauty’s relative resilience to economic instability and its more affordable nature continues to attract fashion players that wish to tap into rising disposable incomes in emerging markets and maintain growth in the developed world, where consumers remain cautious. Fragrances remain the portal into beauty for fashion brands, but colour cosmetics and skin care are gradually gaining traction. With more players in the scene, the competitive field is changing, raising barriers for entry and creating

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Assessing Key Prospects for Fashion Brands in the Beauty Space

Beauty’s resilience attracts fashion players

Despite beauty sales equating to less than a third of the total apparel and footwear market, its higher affordability and resilience during the height of the recession (when growth dropped by only one percentage points) has attracted many fashion players into the industry. Beauty has been imperative for fashion brands looking to maintain growth in mature markets where consumer spending has been reduced but there is still an appetite for luxury brands.

Beauty viewed as an entry point for brands looking for a lifestyle status

As fashion brands continue to pursue a lifestyle status by branching out into other industries including jewellery and sunglasses, beauty is becoming an essential part of the expansion. Its relative affordability and greater accessibility can capture younger and/or lower income consumers and introduce them to a brand.

Fashion brands rule premium fragrances’ rankings

With nearly 80 of premium fragrances total value coming from fashion brands, it remains the most penetrated category by fashion brands, and the most compatible. However, fashion brands are struggling to establish a strong presence in the fast-growing MEA region, where local players dominate fragrances.

US remains the most important premium cosmetics market

The US remains a key market for both industries, maintaining growth levels above Europe, and favours all three key beauty categories equally. Its fiercely competitive field and the strong presence of US-based multinationals like Estée Lauder and Elizabeth Arden raise the competitive barriers for fashion brands.

Skin care, a future niche to be explored

Asia’s predisposition for skin care bring the category to the forefront of fashion brands’ strategies, as the market is also a key expansion area for their apparel and accessories lines. High tech innovation and products that are created to suit local skin types can help fashion brands break into the market.

Introduction

Scope
Key findings

Fashion Entry into Beauty

Beauty’s resilience inspires fashion brands’ expansion
Brand loyalty prevails in beauty over apparel and footwear
Fashion brands’ different routes to entry into the beauty industry

The Evolution of Fashion Brands in Beauty

Fashion brands rule fragrances but struggle to impact skin care
Christian Dior and Chanel remain the biggest players in beauty
Fragrances: The only premium dominated beauty category
Lingerie brands moving into beauty: The case of Victoria’s Secret
Fast-fashion brands raise their beauty profile: The case of Topshop

Fragrances

Fashion brands’ reign in premium fragrances undisputed…
…but dominance challenged where local companies prevail
Brazil, the US and China remain in the spotlight
Non-store retailing key for penetrating emerging markets
The complex competitive landscape of the US market
The world’s best scented fashion rivalry: Chanel No 5 vs J’adore
B eauty players inspired by fashion for success in fragrances

Colour Cosmetics

Fashion brands increase penetration in colour cosmetics
Colour cosmetics: Western Europe stabilises while MEA rises
US leads with emerging prospects in India, China, Brazil
Make-up specialists and local companies shake up the competitive field
Specialists and locals rise while Japanese heavy-weights fall
Calvin Klein’s journey in colour cosmetics: Third time not lucky
Lessons from Chanel: A trend setter in nail polish

Skin Care

Premium skin care’s future growth is in the hands of Asia
China, the US and South Korea remain key drivers to 2018
MEA and Latin America rise in importance in premium skin care
Fashion brands increase their investment in skin care
Alternative distribution channels offer opportunities in skin care
Winners and losers from the fashion world in skin care

Key Issues to Impact Future Development

Beauty: A key portal to creating a lifestyle brand
Gucci: An example of successfully creating a lifestyle brand
Friends and family remain the biggest influencers for consumers
Digital initiatives to boost fashion brands’ presence in beauty
Can success in beauty revive the fashion image?
Expansion in beauty to remain a lucrative prospect
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