Beauty brands need to tap into the shifting desires of consumers, said Claire Hobson, global business director of The Future Laboratory, at the Re-Coding Luxury: Beauty Confronts New Expectations event hosted by Cosmetic Executive Women Inc. in New York on Monday.
Generation Z is growing up, and what they want is different even from the Millennial consumer. “It’s a big leap, but it’s coming like a train,” Hobson said. She was talking about consumers who value luxury brands that are rooted in values and sustainable behaviors — a place she refers to as stage four. “They’re much more of a ‘we’ generation,” Hobson said, which may be because they are expected to live longer. “They just want to know you’re doing the right thing,” Hobson said. For beauty products to resonate with that type of consumer, they’d need to do things like used ethically sourced water in their perfumes, she said.
One step further, in stage five, is luxury that exists largely outside the realm of products — think travel — or in terms of product, the experience of diving into a cold lake to pick out an ingredient, Hobson said.
Luxury beauty companies are definitely not yet at stage five, said Marc Rey, president and chief executive officer at Shiseido Americas, though they may be in stage two or three, or maybe even four, he said. Stage two is a luxury consumer that has developed a sense of taste, seeks knowledge related to the product and is interested in the craft aspect, Hobson said. Stage three is the luxury consumer who is interested in emotion — art, culture and design play a larger role. (Consumers in stage one are the ones looking for $10,000 special edition perfume or logo-baring merchandise, according to Hobson.)
Those categories shift into sharper focus when one thinks of the size — and anticipated growth — of the world’s luxury market. In the U.S. alone, the luxury market is $91 billion, Hobson said. New York alone accounted for $11.5 billion of those sales. Luxury travel retail is expected to see gains as well, growing from $48.7 billion in 2014 to $73.6 billion in 2019.