As new consumer values shift towards more meaningful consumption, priorities are being reassessed, paving the way for new “luxury” attributes beyond a higher price tag and other traditional premium perceptions. With both mass and premium brands looking to adopt new aspirations for ethical, experiential and authentic qualities, the lines between the two segments continue to blur and the “masstige” space is further reinforced.
Although premium beauty outpaced the mass segment in growth terms for the fourth consecutive year in 2018, a significant narrowing of the growth gap between the mass and premium segments occurred.
Technology lowered manufacturing costs, while the advent of the internet, and more specifically social media, diluted the power of the brand. Barriers to entry have fallen and allowed small brands and mass products with low margins to improve their value offer.
More than any other trait, when consumers define what makes a beauty product “premium”, they cite proven efficacy and benefits. Indeed, for many consumers the brand name itself matters less than not only efficacy, but also natural and premium ingredients when categorising a “premium” product.
In North America, Australia, Western Europe and parts of Asia, the premium beauty industries are undergoing the most visible shake-ups. In Eastern Europe, the Middle East and Africa, and Latin America, the luxury codes remain largely more fixed.
For brands both mass and premium, a 3-pronged strategy focusing on product performance, services that help and evocative story-telling has the best shot at success, especially if seeking to charge a premium in an era where luxury is less defined by price.
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