In response to the current economic climate cosmetic giants L’Oreal, Estee Lauder and Proctor & Gamble (among others) are focusing their efforts on appealing to the growing number of cash-strapped consumers shying away from luxury goods by manufacturing value-added products.
As reported last week Proctor & Gamble will be winding down
Max Factor in the US in favour of boosting Cover Girl’s presence, while Elizabeth Arden have announced they will be cutting fragrance to focus on make-up and cosmetics.
Estee Lauder on the other hand released some of their more popular perfumes (such as Clinique’s Happy) in smaller, more affordable bottles. As did L’Oreal Paris, who recently slashed the size of their Viktor & Rolf scents, releasing them in 20mL bottles.
A similar strategy is being applied to the cosmetics department of L’Oreal Paris. But rather than solely focusing on producing smaller versions of luxury goods (to satisfy the demands of their established cliental) they’ve also been busy developing a moisturizer that will retail for approximately half the price of their cheapest brand currently available. This approach works by attracting new buyers to the brand, who will then be fostered into the next generation of loyal followers. The hope is they will then switch to the more expensive brands as their buying power improves.
So, while making sales targets might seem like the only objective for the aforementioned companies feeling the effects of a conservative market. Enticing clients with portion controlled shopping and maintaining brand loyalty is really the goal and the means to a healthy future.