Nancy Jeffries, Online Editor05.25.16
The luxury landscape in beauty is changing, with contemporary consumers seeking more than a luxury brand name and heritage. The increasingly complex prestige arena, which has brought an entirely new set of expectations to the fore, was the topic of discussion at a recent CEW Global Trend Reports event in New York City entitled, Re-Coding Luxury: Beauty Confronts New Expectations.
Carlotta Jacobson, president, Cosmetic Executive Women, welcomed attendees to the event and introduced the speakers, Claire Hobson, EVP, global business director, The Future Laboratory; Marc Rey, president & CEO, Shiseido Americas Corp., and Pete Born, executive editor, Beauty, WWD, who moderated the evening’s discussion. She also acknowledged the event sponsors, Amazon Beauty, Mane, 24 Seven, Grace Beauty, Cosmetica, DSM Nutritional Products, Beauty Inc, WWD, Kaplow Communications and Pixafy for their support. Jacobson cited the Global Trend Report Series as a venue that features “the best and the brightest in today’s beauty industry,” adding that each speaker would share their point of view in defining luxury.
With that, Jacobson welcomed Silvia He, MVM, luxury and professional beauty, Amazon, who provided an introductory perspective on the world of luxury.
“Time is a question for Amazon,” said He. “How can we bring the luxury of time to Amazon to meet the needs of today’s busy consumer? This is Amazon’s approach to luxury,” she said. Whether customers are seeking a rejuvenating eye mask or their favorite lipstick, the online channel offers the luxury of accessibility in a time-stressed environment.
The Five Stages of Luxury
According to Claire Hobson, The Future Laboratory, there is an emotional and psychological component in the luxury beauty quest, and understanding the journey can help brands identify opportunities to connect more deeply with consumers. “What is beauty in 2016? It is no longer centered on the individual or conspicuous consumption. We have to form other types of values around it,” she said.
“Luxury is taking the time to enjoy a massage, yoga and travel. No one said it was Harry Winston diamonds,” said Hobson, adding, however, that she would certainly welcome those Harry Winstons as well.
According to her research, the luxury market was worth $1.1 trillion in global retail sales in 2015, according to Bain & Co. In the US alone, luxury sales totaled $91 billion in 2015, and in New York alone, luxury goods purchased in 2015 totaled $11.5 billion, outweighing those across all of Japan.
Travel retail in the global duty-free market is slated to rise in value from $48.7 billion in 2014 to $73.6 billion in 2019, an almost $25 billion increase in five years. Clearly, the market for luxury goods is explosive; however, connecting with the luxury consumer today requires the understanding of new truths about a multi-dimensional market segment.
Today’s luxury consumer is driven by authenticity and environmental sensitivity, a shift from status-consciousness and conspicuous consumption. The Five Stages of Luxury proposed by Hobson offer guidelines for understanding and identifying opportunities.
Stage One - Acquisition and Value: When luxury is used to demonstrate social position and visibly separate the buyer from the mass market.
Stage Two – Discernment and Worth: “Luxurians” use their wealth to buy brands, products and services that enable them to articulate higher levels of taste, discernment and discrimination.
Stage Three – Emotion and Experience: Purchasers are less concerned with brand and value, and more with experiences and the emotional impact they deliver.
Stage Four – Responsible and Aware: consumers are concerned with a brand’s experiential value, especially around sustainability.
Stage Five – Intellectual and Poetic: Shoppers are driven by adventures and meaningful experiences, where brands, products, and services play a secondary role.
Hobson noted that Stage One features a story of indulgence and aspirational values; an aesthetic that is bold and flashy; and a relationship perspective that offers instant gratification at the moment of purchase.
Stage Two features a story based on discernment and worth, indicating that this consumer has taste and style, and is interested in acquiring brands with heritage that need no explaining. Its aesthetic appeals to men and women who value wealth and artisanship.
Stage Three focuses on emotion and the immersive experience. The experience is what drives this consumer, and its base is comprised of millennials, boomers, and GenXers. Its story is about the sensual experience. It’s not formulaic or proscribed. “This is the biggest category and we don’t see it changing in the near future,” said Hobson. “Art, culture, and design play a strong part in this experience. Brands and products are somewhat secondary, it is a new take on legacy. The story is about its quality as much as its price. Its aesthetic is a pared-down sense of luxury that balances traditional values with contemporary innovative style; and its relationship aspect provides customers with infinite service, as though they were members,” said Hobson.
Stage Four, the responsible and aware aspect, emphasizes luxury that is built in intimate relationships that evolve around ethical community initiatives. It appeals to consumers who are responsible with their spending and as a community they are behaving correctly in a world that needs help. It is about luxury brands, businesses and corporations that are ethically, socially and environmentally astute. It's about the sensitive use of materials, trying to pare things back, effecting change and giving inner satisfaction. Its aesthetic is one of the luxury of simplicity.
Stage Five, the intellectual and poetic stage, is about stepping out of the norm, with luxurians seeking emotional, spiritual and intellectual journeys.
“It is very much about the walls coming down, the need to reconnect, and an aesthetic that is non-materialistic and poetic,” said Hobson.
Moreover, she explained, it is key to understand where your brand plays.
“Recognizing these luxury consumers and re-evaluating their value and what matters to them is the most important. Make sure your brand understands its consumers and lives their values,” said Hobson.
Marc Rey Defines Luxury
Rey and Born took a collective look at the luxury beauty market with an eye on the consumer’s evolving perception, asking, “How would you describe the luxury ethos?” According to Rey, the concept of luxury is being redefined and the consumer’s perception of luxury is driving the evolution.
"The beauty industry needs to re-evaluate how we connect our brands to these new values, in particular the feeling of loss of control resulting from the omnipresence of digital,” he added.
Rey said that the luxury pyramid structure of 10 years ago is outdated and limited.
“At the bottom was the prestige beauty and fashion market, then Tom Cruise and the celebrity trappings of wealth in the center, and at the top, the yachts and super luxury items," Rey insisted. "This has all changed, and now luxury is very relative.”
Born wondered why the luxury fragrance market is stuck in neutral; Rey had an answer for that, too.
“Relativity is key in fragrance, as well," he explained. "The brands that have suffered a lot were too generalist and they lost their value.”
As for the luxury market in general, Rey said it is a question of revenue—how much money do you have?
“For me, Dom Perignon is a commodity now. It’s all relative," he boasted. "A luxury purchase will give you great emotional benefit. But, there has to be a balance between self-indulgence and value."
He cited his niece’s appreciation of a Nars lipstick as her experience of a luxury moment. In contrast, for Rey himself, nine days in St. Bart’s without email is a luxury moment.
"Luxury enhances the beauty of life,” said Rey.
Regarding accessibility to goods and services at every turn, Rey noted that the landscape has become quite intricate.
“The multiplication of touch points is getting very complex and you have to replace control with consistency wherever, whether it is in a store or a digital platform, it has to be consistent. Control is over. For example, the French have a very strong BS meter, so you have to have a strong point of view and be authentic,” said Rey.
“Is the customer in control now?” asked Born. “How does the individual get the courage to make her choice?"
Brands must be consistent and relevant, according to Rey. Word-of-mouth and touch points everywhere have more impact than traditional marketing.
“Another challenge is what kind of change we need to embrace," he added. "It’s different because some brands illustrate trends and others you just don’t agree with. You can’t give up the strong value you’ve been growing for 150 years."
Luxury, Rey reminded the audience, is not a democracy. The customer will buy luxury and want to get a point of view and a surprise.
"It’s not like mass market where you do a focus group and give the customer something,” said Rey.
“Yes,” agreed Born, “It has to be really singular.”
“The narcissism of consumerism was made possible by the digital age; it’s always been there, but now it’s everywhere," he added.
According to Rey, the customer wants a genuine brand with values. Europe is trading down, but it’s still luxury; and the US likes to buy luxury, too, but at Woodbury Common (a luxury goods outlet in Central Valley, NY).
When you take the price value out, little by little you’re going to trade down.”
Carlotta Jacobson, president, Cosmetic Executive Women, welcomed attendees to the event and introduced the speakers, Claire Hobson, EVP, global business director, The Future Laboratory; Marc Rey, president & CEO, Shiseido Americas Corp., and Pete Born, executive editor, Beauty, WWD, who moderated the evening’s discussion. She also acknowledged the event sponsors, Amazon Beauty, Mane, 24 Seven, Grace Beauty, Cosmetica, DSM Nutritional Products, Beauty Inc, WWD, Kaplow Communications and Pixafy for their support. Jacobson cited the Global Trend Report Series as a venue that features “the best and the brightest in today’s beauty industry,” adding that each speaker would share their point of view in defining luxury.
With that, Jacobson welcomed Silvia He, MVM, luxury and professional beauty, Amazon, who provided an introductory perspective on the world of luxury.
“Time is a question for Amazon,” said He. “How can we bring the luxury of time to Amazon to meet the needs of today’s busy consumer? This is Amazon’s approach to luxury,” she said. Whether customers are seeking a rejuvenating eye mask or their favorite lipstick, the online channel offers the luxury of accessibility in a time-stressed environment.
The Five Stages of Luxury
According to Claire Hobson, The Future Laboratory, there is an emotional and psychological component in the luxury beauty quest, and understanding the journey can help brands identify opportunities to connect more deeply with consumers. “What is beauty in 2016? It is no longer centered on the individual or conspicuous consumption. We have to form other types of values around it,” she said.
“Luxury is taking the time to enjoy a massage, yoga and travel. No one said it was Harry Winston diamonds,” said Hobson, adding, however, that she would certainly welcome those Harry Winstons as well.
According to her research, the luxury market was worth $1.1 trillion in global retail sales in 2015, according to Bain & Co. In the US alone, luxury sales totaled $91 billion in 2015, and in New York alone, luxury goods purchased in 2015 totaled $11.5 billion, outweighing those across all of Japan.
Travel retail in the global duty-free market is slated to rise in value from $48.7 billion in 2014 to $73.6 billion in 2019, an almost $25 billion increase in five years. Clearly, the market for luxury goods is explosive; however, connecting with the luxury consumer today requires the understanding of new truths about a multi-dimensional market segment.
Today’s luxury consumer is driven by authenticity and environmental sensitivity, a shift from status-consciousness and conspicuous consumption. The Five Stages of Luxury proposed by Hobson offer guidelines for understanding and identifying opportunities.
Stage One - Acquisition and Value: When luxury is used to demonstrate social position and visibly separate the buyer from the mass market.
Stage Two – Discernment and Worth: “Luxurians” use their wealth to buy brands, products and services that enable them to articulate higher levels of taste, discernment and discrimination.
Stage Three – Emotion and Experience: Purchasers are less concerned with brand and value, and more with experiences and the emotional impact they deliver.
Stage Four – Responsible and Aware: consumers are concerned with a brand’s experiential value, especially around sustainability.
Stage Five – Intellectual and Poetic: Shoppers are driven by adventures and meaningful experiences, where brands, products, and services play a secondary role.
Hobson noted that Stage One features a story of indulgence and aspirational values; an aesthetic that is bold and flashy; and a relationship perspective that offers instant gratification at the moment of purchase.
Stage Two features a story based on discernment and worth, indicating that this consumer has taste and style, and is interested in acquiring brands with heritage that need no explaining. Its aesthetic appeals to men and women who value wealth and artisanship.
Stage Three focuses on emotion and the immersive experience. The experience is what drives this consumer, and its base is comprised of millennials, boomers, and GenXers. Its story is about the sensual experience. It’s not formulaic or proscribed. “This is the biggest category and we don’t see it changing in the near future,” said Hobson. “Art, culture, and design play a strong part in this experience. Brands and products are somewhat secondary, it is a new take on legacy. The story is about its quality as much as its price. Its aesthetic is a pared-down sense of luxury that balances traditional values with contemporary innovative style; and its relationship aspect provides customers with infinite service, as though they were members,” said Hobson.
Stage Four, the responsible and aware aspect, emphasizes luxury that is built in intimate relationships that evolve around ethical community initiatives. It appeals to consumers who are responsible with their spending and as a community they are behaving correctly in a world that needs help. It is about luxury brands, businesses and corporations that are ethically, socially and environmentally astute. It's about the sensitive use of materials, trying to pare things back, effecting change and giving inner satisfaction. Its aesthetic is one of the luxury of simplicity.
Stage Five, the intellectual and poetic stage, is about stepping out of the norm, with luxurians seeking emotional, spiritual and intellectual journeys.
“It is very much about the walls coming down, the need to reconnect, and an aesthetic that is non-materialistic and poetic,” said Hobson.
Moreover, she explained, it is key to understand where your brand plays.
“Recognizing these luxury consumers and re-evaluating their value and what matters to them is the most important. Make sure your brand understands its consumers and lives their values,” said Hobson.
Marc Rey Defines Luxury
Rey and Born took a collective look at the luxury beauty market with an eye on the consumer’s evolving perception, asking, “How would you describe the luxury ethos?” According to Rey, the concept of luxury is being redefined and the consumer’s perception of luxury is driving the evolution.
"The beauty industry needs to re-evaluate how we connect our brands to these new values, in particular the feeling of loss of control resulting from the omnipresence of digital,” he added.
Rey said that the luxury pyramid structure of 10 years ago is outdated and limited.
“At the bottom was the prestige beauty and fashion market, then Tom Cruise and the celebrity trappings of wealth in the center, and at the top, the yachts and super luxury items," Rey insisted. "This has all changed, and now luxury is very relative.”
Born wondered why the luxury fragrance market is stuck in neutral; Rey had an answer for that, too.
“Relativity is key in fragrance, as well," he explained. "The brands that have suffered a lot were too generalist and they lost their value.”
As for the luxury market in general, Rey said it is a question of revenue—how much money do you have?
“For me, Dom Perignon is a commodity now. It’s all relative," he boasted. "A luxury purchase will give you great emotional benefit. But, there has to be a balance between self-indulgence and value."
He cited his niece’s appreciation of a Nars lipstick as her experience of a luxury moment. In contrast, for Rey himself, nine days in St. Bart’s without email is a luxury moment.
"Luxury enhances the beauty of life,” said Rey.
Regarding accessibility to goods and services at every turn, Rey noted that the landscape has become quite intricate.
“The multiplication of touch points is getting very complex and you have to replace control with consistency wherever, whether it is in a store or a digital platform, it has to be consistent. Control is over. For example, the French have a very strong BS meter, so you have to have a strong point of view and be authentic,” said Rey.
“Is the customer in control now?” asked Born. “How does the individual get the courage to make her choice?"
Brands must be consistent and relevant, according to Rey. Word-of-mouth and touch points everywhere have more impact than traditional marketing.
“Another challenge is what kind of change we need to embrace," he added. "It’s different because some brands illustrate trends and others you just don’t agree with. You can’t give up the strong value you’ve been growing for 150 years."
Luxury, Rey reminded the audience, is not a democracy. The customer will buy luxury and want to get a point of view and a surprise.
"It’s not like mass market where you do a focus group and give the customer something,” said Rey.
“Yes,” agreed Born, “It has to be really singular.”
“The narcissism of consumerism was made possible by the digital age; it’s always been there, but now it’s everywhere," he added.
According to Rey, the customer wants a genuine brand with values. Europe is trading down, but it’s still luxury; and the US likes to buy luxury, too, but at Woodbury Common (a luxury goods outlet in Central Valley, NY).
When you take the price value out, little by little you’re going to trade down.”