Grant told CosmeticsDesign.com USA that the economic pressure of 2009 had subjected the luxury sector to increased scrutiny, with many consumers questioning the value and quality of brands at the premium end of the market. While this has hit the luxury sector hard, she stated that lessons have been learned which will soon see the sector on the road to recovery.
Slicker mass market
This decline in loyalty to the luxury sector is more critical when taking into account the huge growth that occurred in the mass cosmetics market. Grant stated that the great innovation, professionalism and slicker packaging of mass cosmetics products appealed to consumers at a time of economic difficulty.
However, Grant also emphasized that there has not been the mass exodus from the luxury market to the mass market, as has often been assumed. Rather, she stated that only one in five women told NPD that they had ‘traded down’ during the recession. The biggest change within the luxury sector, says Grant, was how consumers began to ‘test the waters’, trying other products from within the luxury sector, but perhaps at a slightly lower price.
Biggest trend: Consumer Infidelity
Grant admitted that there had been a rise in the number of women who told NPD that mass cosmetics products were ‘just as good as luxury’, but emphasized that the real trend from the recession had been a rise in ‘infidelity’ more than a complete rejection of luxury products. It is this more promiscuous and less loyal customer which brands now have to work to attract.
In order to re-secure consumer loyalty, Grant said that brands would have to work hard to ensure a strong relationship with a more open-minded consumer. Individuality and communication is key, said Grant, in order to convince the consumer that the product will specifically match their needs.
“The biggest lesson learned from the recession has therefore been not to take consumers for granted, especially not at any price,” said Grant. She said that while times had been tough, there were signs of greater positivity. Brands such as Chanel and Guerlain had done well to re-state their ‘specialness’ in the luxury sector, she stated, developing more attractive and fashionable packaging which would convince the consumer that the product was worth the extra price.
In addition, the massive increase in gift sets, which doubled in volume in 2009, showed the luxury market’s ability to adapt to the changing economic climate. These gift sets proved popular with consumers throughout the recession, since they offered a wider selection of premium products in one purchase. Premium gift sets worth over $100 now capture one quarter of the luxury market, according to Grant.