What do you think about designer cosmetics?
'Cause so far we've welcomed Tom Ford, Burberry, Marc Jacobs, Tory Burch… and soon, Christian Louboutin and Gucci.
Two's company, three's a trend. Five's an enthusiastic bandwagon.
Personally, I love it when a brand enters a new category and completely revolutionizes that market. Thank you, Apple, for deciding to make cell phones. Teary eyes :')
Not that that's what I think is going on here, in terms of designers producing make-up lines. This would be a lot more akin to celebrity fragrances and sock lines at department stores (that would be Rob Kardashian LOL).
It's also highly amusing the way each celebrity/designer insists on how deeply involved they were with the production -- from Sarah Jessica Parker's visits to the fragrance labs, to Tory Burch's fond memories of her mother's vintage perfume bottles, to Marc Jacob's really inspiring, really shiny coffee table (wtf?).
Coughuttercrapcough cough cough. Oh, ahem, excuse me, something went down the wrong pipe there!
Even though I'm poking fun, I'm not against it, no. In terms of designer cosmetics, these designers aren't adding nothing to the market -- and for sure they aren't detracting from it. At best they innovate; at worst… well, if the worst is that these beauty lines turn out to be only permutations of other high-quality brands like Guerlain and Suqqu… well, now, who's going to object to more Suqqu?
Of course I'm interested in the strategy of the companies. What are the incentives to extend a brand into a beauty line?
Why extend the brand into a new category?
First off, let's examine the dilemma of every luxury brand. As a business, they need to grow (get more people to buy!). On the other hand, if their product becomes too popular and ubiquitous, then they're no longer luxurious -- they're a dime a dozen.
Here's a favored strategy as of late. (1) Introduce more products at lower price points. This allows younger people to buy into the brand at an earlier age, with more potential to become brand loyal in the future. Also, lower price points will mean more people in general will buy. (2) Whatever the iconic, core product is (e.g. Chanel's 2.55 bag), keep it exclusive and aspirational. Preserve it as the essence of the brand, and maintain its aspirational nature by increasing its price (which may or may not be accompanied by an increase in quality.)
For example, this summer Mercedes Benz introduced a new entry level model: the CLA. It retails starting at $30,000 -- not much more than the price of a Honda Accord ($25,000)!!. To keep things aspirational, Mercedes Benz also has been pushing products along the other end of the price spectrum. Maybach is one of Mercedes' subbrands and you can have one for a very aspirational sum of $300,000.
Entry level products with entry level prices bring in younger / more customers. We've seen small leather goods, keychains, and tech cases… cosmetics are a new way for brands like Burberry and Tom Ford to implement the strategy.
Why cosmetics, specifically?
"The Lipstick Effect". Fellow Americans! I forget -- are we amidst a recession or a recovery? Sometimes it's hard to tell. Also, by the way, what is going on with our government!!? Oh god, let's just keep calm and pick up a subtle pink nude and/or a matte oxblood lipstick. I don't know about you, but my personal philosophy is: when in doubt, adhere to the laws of economics. And the economists say that during economic decline, women soberly forgo couture, but continue to splurge on new cosmetics.
Once a woman has picked a cosmetic brand, she's less likely to switch. When I'm looking to purchase a cosmetic, it's
practically corporate-scale research & development. It's an aligning of the stars. There are so many variables that need to line up: my skin type, my skintone, the climate I live in, the quality, price, and color of the product. It's a joy to find something that works -- and it's a miracle to find a holy grail product. You bet I'll be sticking with it for a good while… even if only because I ran out of R&D funding.
With cosmetics, women are more likely to buy product 'backups,' multiple colorways, and refer friends. My favorite lipstick right now is the Nars Velvet Matte Pencil. I first purchased it in Never Say Never (a dark fuschia). I liked it so much that a week later I purchased it in another color called Damned (plum oxblood). Well, the latter turned out to be my holy grail, so with Friends & Family sales around the corner, I've got another Damned in my cart as we speak... I'm telling you, these Nars lip pencils will dramatically improve the quality of your life -- girlfriend, get on this!! See what just happened?
Part 2 of discussion of designer cosmetics to come!
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