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Diffusion Lines Tailor Brands to Rough Economy

With stock markets around the globe continuing to zigzag, it stands to reason that even the most strident beauty buffs will be pinching their pampering pennies.

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Special Issue
Beauty Inc issue 12/12/2008

With stock markets around the globe continuing to zigzag, it stands to reason that even the most strident beauty buffs will be pinching their pampering pennies. Fortunately for the nouveau pauvre, niche and prestige beauty brands are now mimicking the fashion world by introducing diffusion products, which are more accessibly priced and more widely available than their signature lines.

Hairstylist Louise Galvin recently launched Natural Locks in British supermarkets, a hair care range that is significantly less expensive than her Sacred Locks line sold in department stores. Target introduced a trio of diffusion lines by up-and-coming indie makeup artists Jemma Kidd, Napoleon Perdis and Petra Strand. Likewise, Jo Wood introduced Everyday, an organic bath-and-body line meant for daily use, designed to complement her higherpriced Jo Wood Organics line. While all were conceived well ahead of the current economic crisis and not specifi cally tailored to cater to the newly budget-conscious, their purpose is to offer a fl avor of the lavish life at a fraction of the regular cost.

“You don’t need to have truffles and caviar in everything to make a good meal,” says beauty maven Marcia Kilgore. “Sometimes it’s about getting the recipe right,” she continues, referring to how brands can innovate with product ingredients to deliver beauty on a budget. She should know. Kilgore introduced the mass market bath-and-body line Soap & Glory after selling her stake in the prestige spa chain Bliss, which she also founded. In October, the brand was bolstered by the introduction of Soap & Glory Skincare, an 11-unit line of facial care items.

Producing in larger scales enables creators to keep prices down. Take Galvin’s hair care lines. The stylist produces 10 times more of her lower-priced Natural Locks line and so increases buying power for raw materials. A 250-ml. bottle of Sacred Locks shampoo sells for about $34.40, for example, compared with a 300-ml. bottle of Natural Locks Pure Shine shampoo for $12.40. “I’m not using quite as much of the really expensive essential oils,” she says, likening Sacred Locks to an eau de parfum and Natural Locks to an eau de toilette. Jo Wood used a similar tactic with Everyday, which focuses on products that fit into a fast-paced lifestyle. Whereas Jo Wood Organics includes a 100-ml. glass bottle of bath oil priced at $70.40, Everyday has a 200-ml. plastic bottle of Cleansing Body Mousse for $23.50.

As a category, beauty lends itself particularly well to occasion-oriented positioning, says Alexena Collins, a director at London-based Brandsmiths. “The beauty and fashion sectors are so ripe for diffusion,” she says. “People think about clothes and beauty in different ways—not just about their fundamental attributes. There’s always an emotional element to them.” She adds that a woman might use one type of makeup when preparing to go out to a party and another when she wants to relax. That pick-and-mix approach is also true for how consumers shop. For example, Jemma Kidd Make Up School products are sold at Neiman Marcus, while the JK Jemma Kidd line is available at Target.

“It’s all about creating daylight between the different brand ranges,” says Rune Gustafson, chief executive officer of brand consultancy Interbrand U.K., pointing to the automobile industry, which has for years offered cars with different specifications at different price points under the same brand umbrellas. “Each range has to deliver against the promises it makes.”

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