The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Welcome to BoF's Beauty Newsletter, featuring members-only analysis and the week's top news from the front lines of the global beauty business. Subscribe here.
NEW YORK, United States – "No one wants to pay $30 for lip gloss."
That’s according to Nicole Quinn, partner at Lightspeed Venture Partners, an investor in Lady Gaga’s beauty brand, Haus Laboratories, which launched on Amazon in September. The label’s own offering is hardly cheap; at $18, it costs seven times as much as the Nyx lip gloss that’s currently the marketplace’s top seller in the category.
The singer (real name Stefani Germanotta) built her line around the idea of a prestige feel at (relatively) approachable prices. In an interview with BoF in June, Gaga said she wanted customers to know they were “getting a big bang for their buck,” whether that meant a $20 liquid shimmer usable on eyes, cheeks and lips, or a lip liner priced at $16.
“I would never be ridiculous and sit here and tell you that we’re selling at mass [prices]… But we’re also not selling at prestige prices,” she said. “It’s something in between. And we fought for it.”
Haus Laboratories is one of many brands to embrace a growing middle ground in beauty, referred to within the industry as “masstige.” Brands like Colourpop, Morphe and Glossier have mimicked the look and feel of luxury products at affordable prices. It’s more than the sleek branding and packaging that resonate; many of these labels embrace trends like wellness and cruelty-free products that started in the luxury category.
It's something in between. And we fought for it.
Masstige brands have helped turn Ulta Beauty into a Gen Z favourite, and serve as an anchor for the revamped beauty departments at Target and CVS, where masstige labels like Versed share shelves with mass staples like Maybelline. Sephora stocks The Ordinary's $6.80 hyaluronic acid serum alongside a similarly named product from Dr Barbara Sturm that retails for $300.
“The blurring of the distinction between health and beauty is freeing the industry from a culture embedded in vanity and luxury,” said Hannah Symons, Euromonitor International’s head of beauty, calling last year “the comeback for mass products.”
What does ‘masstige’ even mean?
Like many new categories, masstige is defined differently depending on who you ask. Generally, the term refers to cheap products with great marketing designed to give consumers the thrill they feel when buying a luxury product. The price point is typically above a drugstore brand, but below the typical Sephora line: Nyx Professional Makeup’s $15 foundation and Glossier Play’s $16 lip lacquer both qualify. The Ordinary, with its sophisticated minimalist branding, qualifies as well, despite its products selling at rock-bottom prices.
Similar masstige movements have disrupted other industries; craft beer is priced just above mass brands like Budweiser, and gives drinkers the same feel of having made the sophisticated choice. Fashion is the exception; in that market, contemporary designers have lost customers to cheap fast fashion and high-end competitors alike.
Why is masstige thriving?
Traditionally, a beauty brand was either drugstore or luxe. But thanks to a consumer-driven power shift in beauty — a result of demand, innovation, social media, the public’s preoccupation with ingredients and access to information — a third categorisation has emerged.
Brands have figured out how to take the “high-performance attributes” once limited to high-end products and incorporate these elements into value-driven formulas. Consumers via some light internet research, can figure this out for themselves, discovering that a $20 serum is sometimes no different than one that costs four times as much.
“We’ve seen such an infiltration of innovation and technology into the mass market, especially with makeup, that people don’t necessarily have to spend $65 to get a decent foundation anymore,” said Sarah Jindal, a senior global beauty analyst at Mintel.
Katherine Power, chief executive of Versed, said partnering with a retailer the size of Target allowed the brand to leverage volume to drive prices down on “superior formulations.” She also went with cheaper packaging, foregoing the custom tubes, jars and bottles that are among the biggest costs in skin-care. The brand’s typography and pastel bottles give its products a luxe feel instead.
“We did all completely stock packaging,” Power said. We really wanted to put all the value in the liquid in the bottle.”
It's a shrinking middle of prestige that used to be able to get that consumer to pay up, but now you're seeing it really kind of split.
Patrick Robinson, managing director at CircleUp Growth Partners, noted that the “biggest outliers” have been brands that “play at a more mass price point” but have prestige branding. They also have strong direct businesses and are sold in prestige channels.
“It’s a shrinking middle of prestige that used to be able to get that consumer to pay up, but now you’re seeing it really kind of split,” he said.
Who buys masstige?
Masstige is also a sector that can successfully attract multiple demographics. A person shopping at their local drugstore might be willing to shell out a few extra dollars for a “masstige” item even though they wouldn’t buy a $45 foundation at a department store. The customer who would buy that foundation might try a less-expensive option if the branding is right.
“[Skin-care brands] have been able to reassert their value to consumers with no-frills, results-driven products that deliver, regardless of price,” said Symons. She believes the rise of new “status symbols” — heath and good intentions — are responsible for beauty’s new middle.
It took Ulta 25 years to convince the brands that they were the right place.
This is true, especially for coming of age Gen Z’s who don’t care if something costs $5.99 or $30; it’s the founder’s values that are paramount. If lip gloss is vegan and cruelty-free, it doesn’t matter how much it costs.
Their parents, however, still likely to segment beauty by price, could be swayed to go masstige if the branding is right. Because of the elevated feel akin to expensive Sephora lines, affordable labels like The Ordinary and Versed have become popular with even the most loyal prestige customers.
What should beauty brands and retailers do?
Wendy Liebmann, chief executive of consulting firm WSL Retail Strategy, said today’s shopper is in the middle — they subscribe to a high-low philosophy and have a more open-minded approach to beauty purchases.
“Retailers, and more importantly manufacturers, refuse to recognise that,” said Liebmann. “It took Ulta 25 years to convince the brands that they were the right place.”
Some of the largest beauty conglomerates in the world are centred around the idea that mass and prestige are two different, non-overlapping categories. Firms from L’Oréal to Coty segment by mass and luxe divisions, and others, like The Estée Lauder Companies, view beauty through a singular, prestige-only lens.
Even brands and retailers that have introduced products that fit the masstige category sometimes avoid the word, fearing being associated with the “mass” term.
During Estée Lauder’s investor day in July, Chief Executive Fabrizio Freda underscored the corporation’s commitment to operating solely as a “pure-play” purveyor of prestige.
We are distinctively a unique company: not only are we a force in one of the most attractive consumer areas, prestige beauty, we are 100 percent focused on it,” Freda said. “Profitable growing in prestige beauty is what we do."
Lauder does, however, own a minority stake in Deciem, parent company of The Ordinary and key masstige player.
But pretending customers are only shopping prestige is a mistake that retailers and brands can't afford to make, especially given what's happening with makeup right now. It's hard enough to get people buying colour cosmetics as is; charging $50 for a lipstick probably isn't helping.
THIS WEEK IN BEAUTY
Coty's first-quarter revenues miss Wall Street expectations. The conglomerate saw revenue for its consumer beauty division fall by 9.7 percent.
The skin positivity movement is evolving. Attitudes towards skin are following in the footsteps of"body neutrality, which says "all bodies are bodies" instead "all bodies are beautiful."
CoverGirl has brought back its original headline. Apparently, the re-brand CoverGirl underwent two years ago was unsuccessful for parent company Coty Inc.
There are alternatives to opioids for managing pain after cosmetic procedures. Some doctors have stopped prescribing narcotics after procedures because it's "not worth the risk."
Small investments may be the way to go for beauty startups. A series of smaller fundraisers, such as Love Wellness' $4 million Series A, may be the result of cautious investors preparing for a recession.
This company supports female facial hair. Women's grooming brand Billie is asking women to grow out their moustaches this "Movember."
T.I. got a lot of blowback for talking about his daughter's hymen. The rapper said he accompanies his daughter to the gynaecologist to "check her hymen" to confirm virginity.
More women are embracing their grey hair. Once associated with "letting oneself go," there's been an attitude shift when it comes to younger women sporting dye-free hair.