When I was a student with a limited budget, buying a prestige beauty product was something to look forward to. I would make a wish list and revisit it several times before actually making a purchase during one of the rare sales events. The feeling I got from attaining those products and being able to do so at a promotional price might have been comparable to what other people feel when getting a good deal on an expensive car – I was in possession of luxury, and it felt special.
For years, prestige brands and retailers held beauty sales events every now and then, but those were rare occasions. The high price-point of prestige beauty products was one of the factors that made consumers see the industry as a supplier of a luxury lifestyle. The possession of a high-end item and the hunt for it sparked joy. During the past few years, however, the number of discounts that consumers are being offered has grown exponentially. And with sales now happening so often, it’s no longer a hunt for treasure; it’s more of a free-for-all. Discounts and promotions along with multiple “under $25” offers are taking the “prestige” out of prestige. These deals are blurring the lines between prestige and mass. And when it comes to quality, 69% of U.S. makeup consumers consider makeup brands found at drug stores or mass merchandisers to be just as good as higher priced department store brands.*
Brands and retailers alike are making sure they offer enticing deals on their beauty products in hopes that consumers will rush to purchase. But does it work? NPD data reveals that the highest spikes seen year-to-date through September for prestige makeup in the U.S. occurred during weeks in March, April, and May when large prestige beauty retailers held their major sales events. This indicates that consumers are interested in value and stock up on beauty products during sales. However, for the first three quarters of the year, prestige makeup sales declined in both dollars and units as compared to the same time period last year, and makeup’s negative performance shows that even with discounts and promotions the category is struggling to pique consumers’ interest. Beauty shoppers are looking outside of traditional prestige channels even when they are offered good deals. This raises the question: are discounts in prestige really the way to connect?
As we enter the holiday season, I expect that beauty products will be a gift of choice for many people. While hot deals have become a holiday shopping staple, prestige brands and retailers must strike a balance between offering value and staying true to their heritage.
*Source: The NPD Group/ Makeup In-Depth
Consumer Report 2018