Premium beauty growth reached historic highs—6%—in 2015, supported by a growing shift toward higher-quality and more personalized solutions. Consumers are reassessing their values and priorities and are increasingly focusing on experience over ownership.
To justify spending on premium, expectations are shifting from status-driven purchases to those that are more result-driven and individualized.
The Euromonitor International Beauty Survey found that not all consumers with premium preferences follow up with an actual purchase consistently, but only buy premium items where they see value in spending more.
Given the strong influence of Asian beauty on international markets it is likely that beauty routines in developed countries will include more products...
This gap is most significant in hair care, with only 11% of total market size generated by premium products, while half of consumers express premium preferences. Understanding their secrets can help brands capture new growth.
Secret 1: More Extensive Beauty Routines
However, in Western Europe, particularly France, Germany and the United Kingdom, less than 25% of premium buyers have skin care regimens involving more than eight products a week.
Any strategy to upgrade consumers to the premium tier requires portfolio extensions with distinct and targeted product benefits. Addressing more specific concerns naturally leads to routine expansion and further product adoption.
Secret 2: Demanding Higher-quality and International Status
Beyond price and performance, premium values are also shifting toward ethical credentials, authenticity and connection with the brand’s story and ultimate personalized experience. In terms of brands, it is twice as important for premium buyers that a brand has an international presence than for value buyers.
Entering new geographies has long been an essential part of successful premium brands’ growth strategies, but it also needs to be exploited as a brand-building tool.
Although a number of niche, local/regional brands are currently showing strong growth performances in premium skin care, such as Sulwhasoo or Rodan + Fields, their market value share gain is strongly driven by their international expansion. Entering new geographies has long been an essential part of successful premium brands’ growth strategies, but it also needs to be exploited as a brand-building tool.
Successfully leveraging international presence means increasing alignment with local beauty cultures and habits and addressing market-relevant concerns.
Secret 3: Brand Perception Management is Critical and Difficult
For example, in 2015 Estée Lauder Companies launched Estée Edit, an online magazine that spreads the brand’s vision across beauty and lifestyle. Consumers blogging and reviewing iconic brands offer the company access to public opinion and a forum to interact and shape perception.
The perception of premium products is also changing over time, influenced by the latest trends.
Brand perceptions evolve over time, which makes managing them more challenging. And so it is essential to counteract all negative influencers with quick responses to any dissatisfaction that is expressed by consumers.
Given that high efficacy claims are the foundations of premium positioning, monitoring feedback about quality and product experience must be the most important aspect of managing brand perceptions.
The perception of premium products is also changing over time, influenced by the latest trends. Currently, beyond high efficacy, strong influencers are ethical claims, authenticity, connection with the brand’s story and product experience.