“Luxury products promise exclusive benefits through expert, innovative formulations using unique, costly and often exotic ingredients,” said Natalie Granik Seidman, director of NPD Beauty. “These products prove that value is not necessarily defined by price and customers are willing to pay more for what they perceive as higher quality. In the upcoming year, we expect to see new, higher-priced items continue to drive the market.”
Fragrances, however, reported a 3.5% decline, generating sales of $2.8 billion in 2002. Those targeted to consumers under age 30 fared well, such as Polo Blue and Glow by J.Lo, but at the cost of existing brands. “Existing brands declined, leaving the question of whether new launches are taking share away from existing brands,” added Ms. Seidman.
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