In the ever-evolving landscape of luxury, designer brands are making significant strides in the beauty industry. This transition isn't merely a passing trend; it's a strategic move driven by several factors that intersect the worlds of fashion and beauty.

Why designer brands are moving into beauty

Beauty provides an accessible price point for customers to own a piece by a luxury brand. Beauty is becoming increasingly important for luxury brands, as an equity and sales driver as competition in the category continues to heat up. Luxury brands use the ever-evolving beauty category as a space to try new things and see what works well with their customer, and what drives new business. Beauty is a more stable business compared to Fashion and has been shown to buck the trend during any recession. It can provide additional revenue opportunities for brands that have an established customer base and also provide an entry price point for aspiring customers.

How easy is it for luxury fashion brands to enter the beauty market?

Although Beauty is seemingly an easy category to transition into based on the top-line growth and buoyancy in challenging economic times, it is highly competitive. We have seen designer brands challenged by this such as Burberry who bought their Beauty category back in-house only to outsource management a few years later. There are several factors brands need to consider when entering the Beauty market; such as their point of difference within the Beauty category, the performance of the products, the distribution strategy and customer engagement strategy.

Prada, for example, have already repositioned their fragrance in recent years to be more prestige and exclusive, from the scents, distribution and price points and is extending again to try and win in the colour category.

Why consumers are still craving ‘luxury’ beauty

As the costs of leather goods increase at large Fashion houses, beauty provides an accessible price point for customers to own a piece by a luxury brand. You have multiple customers - aspirational who want to buy into the brand but can’t yet afford it as well the customers who already love the brand and extend their purchase from fashion to beauty. A lipstick is one of the few products that you carry around and use in public, so can also be used as a status symbol.

The risks for designer brands pivoting into make-up

Fragrance used to be the obvious choice for brands to enter the beauty category but colour seems to be where they’re now making an entrance. Take Victoria Beckham for example, her following online is huge, which works very well for her, but are these followers her beauty consumers? The recent retail expansion into Selfridges is a move to expand her audience to a wider reach as she adds more categories. Expanding the distribution shows she is serious about the beauty category and wants to capitalise on physical retail sales that form the foundations of most UK beauty brand's turnover. Beauty is fast moving though, with campaigns and product launches, but it’s often the same products that make Beauty businesses profitable, the 80/20 rule. We will have to see how her business grows and maintains interest with customers.

This is a really interesting time for designer beauty. Brands like Chanel and Dior have been in this space for so many years, but there are a lot of other new entrants to the market. The big launch that we saw nearly 10 years ago was Louboutin Beauty. I was at Selfridges at the time, and remember the first product they launched, the nail varnish sold out in hours. Many people were finally able to buy into the brand who weren’t able to before and the die-hard beauty and shoe fans had to have it, even at an eye-watering £45 for a nail varnish! They have now successfully expanded into colour and fragrance.

Is beauty fashion’s saving grace?

The Designer and Luxury Beauty market is showing steady annual growth, with many new entrants over the last five years creating a ‘lipstick lux boom’ such as Louboutin, Valentino and Gucci. In the past, designer brands have launched fragrance ranges, but in recent years fashion fragrances have become less desirable, as niche fragrances have become more popular. Luxury brands are moving into make-up and skincare to expand their beauty offerings, other new entrants are Stella McCartney, Caroline Herrera, Dries Van Noten and Byredo.

Two main advantages of established brands launching new Beauty products or lines are: their already engaged customer base, and the opportunity to convert aspiring customers with lower price point/entry-level options. I don’t see it as a saving grace but as an additional revenue stream and an opportunity to build brand equity if done it the right way.

Bricks and mortar versus online

For designer beauty brands, launching with high-end department stores is the obvious route to market, as they are huge players and volume drivers for beauty. However, the dynamic of beauty retail in the UK is different to the USA, as designer. In the UK high-end department stores are key players in beauty retail as well as pure-play beauty and driving volume, whereas in the USA Beauty pure-play retailers are more dominant.

Beauty is sensorial and different categories align to different senses, from fragrance and smell, skincare touch, texture and performance and makeup is visual creating a new look, identity and confidence as well as how it feels and stays put. There is much more to play with in stores but digital is crucial to build connections and educate customers.

While traditional brick-and-mortar stores remain essential for luxury beauty brands, digital channels play an increasingly crucial role in customer engagement and education. Balancing sensory experiences with online accessibility is key to building lasting connections with consumers.

What’s next from fashion design houses in beauty

Skincare and wellness are the obvious trends that translate from designer beauty. The skincare market is huge, although saturated, but collaborations between experts like doctors and designers are an opportunity, we have already seen this from Victoria Beckham and Augustinus Bader.

Wellness is booming and as designer brands look to create a lifestyle the experience they create with a customer from scenting their home, to ingestibles to wellness experiences and retreats I see it as an opportunity. Moreover, the wellness industry's growth presents an avenue for designer brands to create holistic lifestyle experiences for their customers.

In conclusion, the intersection of fashion and beauty represents a dynamic space ripe with opportunities for designer brands. By leveraging their brand equity, engaging with consumers across multiple channels, and innovating within the beauty category, fashion houses can carve out a distinct presence in this evolving landscape. As the industry continues to evolve, it's clear that the fusion of fashion and beauty is here to stay.

Read more of my thoughts alongside other insights in ELLE.

The Fusion of Fashion and Beauty: Why Designer Brands Are Making the Move