Historically, luxury skincare has skewed older. When skin issues related to aging, like fine lines, grooves, or dark spots, start to appear, the interest and price tags willing to be dished out on creams and serums go up with it.
In its July 26th letter to shareholders, LVMH reported a remarkable first half of the year, partly due to a "rapid growth in fragrances and skincare" and a "strong rebound from Sephora."
Today, luxury skincare is finding an entirely new purpose (and growth) with unexpected strategies.
Luxury skincare is anti-Anti-aging
In 2017, Allure sparked an important conversation when then editor-in-chief, Michelle Lee, announced they would no longer use the term "anti-aging." Denounced as unrealistic, ageist, and sexist, soon after, media outlets and skincare brands followed suit. Lancôme USA was part of that shift, cementing that it's not about hiding your age but investing in your skin health.
The social narrative has changed. Rather than taking a reactive approach, the opportunity here lies in winning customers even without skin concerns, an unbelievably overlooked market. This new perspective invites younger demographics into the room, encourages the desire to elevate across all categories, and as with all investments, reaffirms paying a premium as an intelligent decision.
The ultra-wealthy are wellness enthusiasts
New passions have been awakened. Wellness today is a major investment for the very wealthy. Out of the top 30 global interests of multi-millionaires, passions like philanthropy, the outdoors, art, music, and health and wellness dominated the top half of the list.
The wealthier you are, particularly for women, health and wellness carry a bigger share of the pie. For ultra-wealthy women with a net worth of $30M and up (UHNW), their interest was triple that of their multi-millionaire counterparts. More than 21% indicated health and wellness to be of significant interest.
Luxury spas offer brand-exclusive opportunities
In contrast to daily skincare routines, where many consumers use a mix-and-match brand approach rather than a system, spas offer brand exclusivity.
A tribute to the signature style of Christian Dior, The Dior Spa Cheval Blanc opened last year in Paris as a partnership between Cheval Blanc Paris and the Maison Dior. Beautifully decorated in classical woods and natural marble, the spa embodies the spirit of a Parisian apartment and offers treatments only using the Dior skincare lines.
Today, Chanel, Elemis, and Espa all have spas in North America and Europe.
New product strategies
The long-established model, by incumbents like Estée Lauder, was focused on maximum category presence. This meant producing all products in your category so that everything a consumer could possibly want, they could find within the universe of one brand. It translated to higher average order values, lifetime value, and loyalty. Today, luxury spas celebrate this one-brand approach, but it no longer works for many consumers, coming off as too general and translating to a lack of expertise.
This change in consumer perception creates new opportunities for product strategy. Fast forward to the present day, and digital has lowered the barriers of entry and made possible the emergence of new brands - specialized brands at premium pricing.
Encouraged by retailers like Sephora, daily multi-step skincare regimens promote a pick-and-mix mindset toward products, brands, and categories. Outside of luxury spas and branded wellness centers, single-brandedness is fading into the background.
Collaborations provide an opportunity for legacy brands to step out of the perception that a jack of all trades is a master of none by recognizing the appeal of specialty brands and leaning into expertise as a success strategy.
Luxury skincare leans into wellness trends
There is a growing interest in health and wellness and a large community of enthusiasts across the premium and luxury worlds. Creative yet different strategies are finding success in attracting and retaining consumers. The future of luxury skincare lies in its ability to understand the underlying social and cultural underpinnings of these strategies. From positioning adjustments to luxury spas and collaborations, a reframing of skincare outside of beauty is imperative. Wellness is the new face of skincare, and it's worth the investment.