Understanding the Luxury Beauty Consumer: Who They Are and What Drives Them
The luxury beauty market remains vibrant and is poised for growth, with consumers ready and willing to invest in premium products. This insight comes from industry experts Jessica Matlin, Director of Beauty at Moda Operandi, and Milton Pedraza, CEO of the Luxury Institute.
The Diverse Demographics of Luxury Beauty Consumers
At Moda Operandi, a leading online luxury retailer, the appeal lies in its curated and premium beauty offerings. Jessica Matlin highlighted some standout brands that resonate with their customers, including Westman Atelier, ISAMAYA, and Surratt.
Contrary to the common perception that luxury beauty is dominated by younger generations, Matlin emphasized the importance of catering to all age groups. "It is short-sighted to just speak to Gen Z or Millennials. Brands need to speak to all women, across all generations," she said. Iconic founders like Gucci Westman, Gwyneth Paltrow, and Bobbi Brown exemplify this inclusive approach, successfully engaging consumers across different age brackets.
The Two Faces of Luxury Beauty Consumers
Milton Pedraza identified two primary segments within the luxury beauty market: high net worth individuals and ultra-high net worth individuals. Although the ultra-wealthy represent only 5% of the population, they account for a staggering 40% of luxury sales. These consumers seek value through differentiated, high-quality products. However, Pedraza pointed out that their loyalty is often rooted in the relationships they build with brands. “They want to feel people are being nice to them and serving not because they are wealthy, but because they like them,” he noted.
Building Relationships in the Digital Age
Even in a digital world, luxury beauty consumers expect the same level of sophistication online as they do in physical stores. This means high-end website design, personalized recommendations, and seamless customer service. Digital platforms must reflect the exclusivity and elegance of the brand, offering a luxurious experience at every touchpoint. Brands that excel in this area, like Moda Operandi, are redefining what it means to offer luxury in the digital age. Despite being a digital platform, Moda Operandi excels at fostering trust and loyalty among its customers. Matlin explained that the company's private-client team functions like personal shoppers, offering tailored advice and direct access to brand founders for personalized recommendations. This high-touch approach is key to creating a luxurious experience online.
Today’s luxury beauty consumers are increasingly conscious of the environmental and ethical impact of their purchases
Both Matlin and Pedraza agree that the digital realm can deliver luxury experiences that rival physical retail environments. The challenge for beauty brands lies in balancing luxury aesthetics with sustainability. Matlin highlighted the growing trend of using eco-friendly materials, such as faux leather and innovative mushroom-based alternatives, to maintain the luxurious appeal of packaging without compromising on environmental responsibility.
They seek brands that align with their values, such as eco-friendly packaging and cruelty-free products. However, they also expect these sustainable practices to be seamlessly integrated into the luxury experience, without compromising on quality or aesthetics.
Going Upmarket: The Future of Luxury Beauty
In closing, Pedraza advised brands to focus on the upscale market. "Follow the money. Go upmarket. Downmarket is just a race to the bottom," he said. As technology, including tools like ChatGPT, makes it easier for consumers to compare prices and services, brands that position themselves as premium will stand out. The key is to offer something more than just a product—it's about creating an experience and building lasting relationships with customers.
As the luxury beauty market continues to evolve, staying attuned to these consumer insights will be crucial for brands aiming to thrive in this competitive landscape.
