Beauty, the new engine of growth for luxury fashion brands. #Luxury Business Group #Insight |
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Luxury Fashion Brands in Crisis Turn to Beauty for Growth
At the intersection of the “small luxury” trend and global expansion, beauty has emerged as the new engine of growth for luxury fashion brands. |
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Marketing & Communication Team |
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"Instead of handbags that cost thousands of dollars, limited-edition luxury lipsticks are flying off the shelves."
Even in an economic downturn, people may not buy a bag—but they’ll still buy a lipstick. This shift in consumer behavior is redefining the luxury industry. |
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👀 What You’ll Learn From This Article
✅ Why are luxury brands shifting their focus from fashion to beauty?
✅ How did a single lipstick become central to global luxury strategy?
✅ What is the most crucial success factor in luxury brands’ move into beauty? |
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*After 171 years, even Louis Vuitton is finally stepping into the beauty arena.
There’s a striking shift happening in the beauty sector. Once exclusive to fashion halls, brands like Louis Vuitton and Prada are now showing up in beauty corners. Once known only for handbags and clothing, these maisons are now offering lipsticks, foundations, and perfumes—signaling not just expansion, but a strategic survival move.
Even amid economic uncertainty, the beauty market has shown steady growth. Today’s consumers are unwilling to let go of luxury—choosing instead to experience it through “small luxuries.” Industry experts predict this trend will only grow stronger in the coming years.
So what’s driving this sudden pivot to beauty? Let’s explore the strategies behind this shift and the ripple effects it’s sending across the entire industry—through four key trends every insider should be watching. |
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1️⃣ Cosmetics: The New Growth Driver Amid Stagnant Sales
The financial logic behind luxury’s beauty pivot is compelling. While traditional luxury goods like clothing and bags are struggling under global economic pressure, the beauty segment is holding strong.
Take LVMH’s 2023 performance as an example: while revenue from fashion and leather goods dropped 3% year-on-year, its perfumes and cosmetics division grew by 2%. Achieving growth in a declining market is a noteworthy signal.
According to Bain & Company’s 2024 luxury report, “beauty products—especially fragrances—continue to perform well, driven by consumers’ appetite for ‘small luxuries.’” In fact, beauty led all luxury segments in 2024 with a growth rate of 3–5%.
The global outlook is also promising. Global Market Estimates (GME) projects the beauty industry will grow from $380.2 billion in 2021 to $465 billion by 2026, reaching $519.1 billion by 2033. McKinsey adds that the true luxury and ultra-luxury beauty market, now worth $20 billion, could double to $40 billion by 2027.
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2️⃣ Tailored Market Entry Strategies by Brand
Each luxury brand is taking a unique approach to entering the beauty space.
Louis Vuitton recently announced its official foray into makeup with the launch of La Beauté Louis Vuitton. Previously limited to fragrances and beauty pouches, the house is expanding into makeup—led by none other than Pat McGrath as its creative director.
McGrath has been the backstage makeup artist for Vuitton’s fashion shows for over 20 years, working closely with artistic director Nicolas Ghesquière since 2014 and now collaborating with men’s creative director Pharrell Williams. “People have been asking for years when Louis Vuitton Beauty would launch—now it’s finally here,” she shared.
One detail worth noting: the lipstick line will include 55 shades, a nod to the Roman numeral interpretation of LV. This level of storytelling reflects the brand’s dedication to detail and heritage.
Jacquemus, on the other hand, has opted for a different strategy—partnering exclusively with L'Oréal to launch a new beauty brand. Founder Simon Porte Jacquemus noted that “beauty has always been part of the vision,” signaling a long-term investment in brand storytelling rather than short-term sales.
Marc Jacobs is staging a comeback, relaunching its beauty line through a partnership with Coty after exiting the space in 2021.
Other key players like Prada, Hermès, Gucci, Dior, and Chanel are also ramping up their beauty portfolios—some launching formal beauty divisions for the first time.
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3️⃣ Lowering the Barrier: Beauty as an Entry Point for New Customers
Luxury brands see beauty as a powerful way to engage a broader audience. Compared to multi-thousand-dollar fashion pieces, premium cosmetics—ranging from tens to hundreds of dollars—are far more accessible.
According to a report by NIQ, today’s consumers no longer purchase exclusively within luxury brands. They move fluidly across price points, categories, and channels. Even high-end beauty shoppers often purchase both luxury and mass-market products. A Chanel skincare customer might pick up a budget sheet mask at a drugstore, while a first-time buyer may treat themselves to a Dior lipstick.
This blurring of lines between mass and luxury opens the door to a wider consumer base. It also addresses a critical psychological need—allowing consumers to indulge in “second-tier luxury” even during downturns.
Luxury brands are also reappropriating the rise of the “dupe” culture—where consumers seek affordable alternatives to premium goods—as an opportunity. Rather than losing customers to cheaper imitators, they’re drawing them back with luxury-branded beauty products at more accessible price points. For first-time buyers, beauty serves as a gateway experience into the world of luxury.
Beauty remains the easiest, most effective way for consumers to connect with a brand—and for brands to expand their reach, especially among Millennials and Gen Z. These younger consumers are highly responsive to product reviews and swatch content on social media, making beauty an ideal touchpoint.
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4️⃣ Global Expansion Brings a New Challenge: People
As luxury brands expand their beauty divisions globally, understanding local beauty cultures—Middle Eastern fragrances, Asian skincare rituals, Western makeup preferences—becomes essential. But the real key to success? The people on the ground.
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Why is the beauty retail environment so different?
Luxury cosmetic stores demand a completely different approach compared to fashion boutiques.
- A multi-sensory space: Beauty products engage all five senses. Consumers test fragrances, textures, finishes—searching for a personalized experience. Here, staff play a pivotal role. Beyond explaining products, they must understand skin types, preferences, and deliver truly personalized consultations.
- Short time, strong impression: Many luxury beauty counters operate as shop-in-shops within department stores, with limited space and customer interaction time. Staff must communicate brand heritage and value quickly and effectively, making every second count.
- Repeat purchases = relationship-building: Unlike fashion items, beauty products are bought repeatedly. That makes beauty stores a crucial starting point for long-term customer relationships. Personalized service and ongoing care are key to building loyalty.
Ultimately, the success of luxury beauty retail lies in creating immersive service experiences that go beyond the product. At the heart of that experience is a highly trained, empathetic, and knowledgeable team.
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The beauty business is no longer optional for luxury brands—it’s essential. Beauty offers the most approachable way to deliver a brand’s world to the consumer and has become the beating heart of the small luxury trend.
What’s even more notable is how beauty is fueling luxury brands’ global market expansion. From the Middle East to Asia and the West, brands are facing new challenges: how to ensure a consistent, luxury-standard brand experience across all global retail touchpoints.
No matter how good the product or story, if that brand experience fails at the point of customer interaction, it loses meaning. In beauty, that frontline experience includes not just product functionality but also heritage and luxury storytelling—making the role of store staff absolutely critical.
LBI (Luxury Business Institute) supports this global expansion through specialized training programs tailored to regional cultures and cosmetic retail environments. We help brands deliver a truly global standard of service, bringing their luxury DNA to life across every touchpoint.
At the end of the day, the key to winning in the beauty sector lies with people—both staff and customer relationships. |
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To support this transformation, LBG offers a fully integrated suite of services for luxury beauty brands:
- LBI (Training Division): Employee training and coaching for cosmetic retail, regional service playbooks, VIP customer care program design, in-store mystery shopping, and global-standard curriculum implementation. On-site training is also available in overseas markets to ensure brand consistency.
- LBT (Talent Division): Recruitment services for cosmetic stores, including store managers, beauty advisors, sales staff, trainers, and HQ support roles. We match brands with the best-fit talent, from industry veterans to new recruits.
- LBP (Consulting Division): Strategic consulting for premium mall and department store entry, brand development and positioning, global market expansion, competitive analysis, and differentiation strategy.
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Luxury Business Group (LBG) |
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Connecting Talent and Opportunity
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📌Brand Store Operations
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📌Planning and Branding
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📌Corporate Training and Recruitment
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Luxury Business Group (LBG) supports numerous companies in the luxury service and retail sectors across Europe and Asia, leveraging its unparalleled expertise in providing total solutions for service and retail training and consulting.
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Luxury Business Group (LBG)
LBG Marketing & Communication Team | Gayoung Lee, Jade Lee, Booki Jung |
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