This holiday season, amid global concerns of rising interest rates and possible recession, many beauty companies are marketing gifts that might seem out of sync with the economic climate: extremely expensive seasonal offerings, some of which are several hundred times the price of one of their entry-level items.
Yet beauty industry insiders say they are confident that, for the people who can afford such luxuries, the strategy makes sense.
“There’s a lot of depressing things going on right now — Covid’s still here, there’s talk of recession, inflation is terrible — so consumers who have the means to do it are treating themselves, because as consumer confidence goes down, the Lipstick Index kicks in,” said Larissa Jensen, a beauty industry adviser at the marketing firm NPD, referring to an industry theory that says that shoppers buy small luxuries, like lipsticks, at times of economic instability.
The European skin care brand La Prairie has several indulgent holiday gift sets, priced from 1,814 Swiss francs to 4,257 Swiss francs (about $1,930 to $4,520) while the skin care company Omorovicza, whose products include Hungarian thermal waters, has a Blue Diamond Cabinet coffret retailing for 850 euros ($880). And Vintner’s Daughter, a cult-favorite American brand, has offered, for the first time, a 100-milliliter bottle of its Active Botanical Serum for $680. When the item was introduced in late October, half of the 100 bottles available were sold within 24 hours, the brand said.
The top-price holiday set from La Mer, owned by Estée Lauder, was priced at $1,495. But the senior vice president of global marketing for La Mer, Lesley Crowther, said that clients “recognize that if they are going to be spending money this season, that actually La Mer is very much an investment in themselves, in their skin.”
The French brand Guerlain’s holiday introductions included three limited-edition packages of its Orchidée Impériale Black cream, designed in collaboration with the Chinese artist Li Hongbo and priced from €1,360 to €6,000. Another offering from the brand, a €15,000 limited edition of its L’Heure Bleue scent, was produced in collaboration with the Yves Klein Foundation in the artist’s distinctive shade of cobalt. It sold out not long after it went on sale in October, according to Véronique Courtois, Guerlain’s chief executive.
As in previous years, skin care and fragrance are the season’s prevalent categories of high-priced seasonal beauty gifts. The options of color cosmetics tend to be somewhat less pricey, although in September, Fenty Beauty, Rihanna’s beauty line, introduced a $500 limited-edition refillable case for its lipsticks that was covered with 975 Swarovski crystals.
The holiday season is coming at the end of a year that has been extremely successful for the luxury beauty industry. In the United States, for example, unit sales of prestige beauty items — which includes those sold at department stores and upscale retailers like Sephora — increased 15 percent from January through mid-October in comparison with the same period last year, according to NPD. But unit sales in categories like clothing, footwear and accessories declined, year over year.
And despite the headlines, retailers say holiday sales overall are expected to be buoyant. In the United States, according to a report issued last month by the research company Forrester, shoppers are expected to spend $943 billion, 6.1 percent more than last year — although not every one of them will be boasting about making extravagant purchases outside of a close circle of family and friends.
“There is complete cognitive dissonance between what people are actually doing and what people are saying that they’re doing,” said Sucharita Kodali, a Forrester retail analyst who contributed to the report.
“There’s actual spend, and all of this consumer sentiment in the media and in politics about things being in terrible shape,” she said. “I think things are much better than consumer surveys would lead you to believe.”
Understandably, holiday sales are a priority for beauty brands: In the United States last year, according to NPD, more than a quarter of 2021’s prestige beauty sales, which amounted to more than $22.3 billion overall, occurred in the last two months of the year.
Industry executives say they believe that many shoppers are determined to have a typical holiday season this year, including giving and receiving the kind of presents that have been traditional for them.
“People do value that kind of consistency,” said Ms. Crowther of La Mer. “I think it makes people feel comforted and positive, like there’s a sense of continuity there.”
Mia Collins, the head of beauty at Harrods in London, also said this season should be different than recent ones. “In 2021, we were still living large under the cloud, at that moment, of Omicron,” she said, referring to a variant of the coronavirus. “Obviously, Christmas 2020 was the Christmas that never was.”
This year, she said, Harrods is offering holiday beauty gifts at a wide range of price points, including what she described as “some very spectacular gifts” aimed at, as she put it, “those that really want to be very overt in that gesture of thanks and gift giving.” The store’s assortment includes a leather trunk by the British brand Tanner Krolle that has been filled with 19 scents from the lifestyle brand Aerin, priced at 15,000 pounds ($17,730).
At the American retailer Neiman Marcus, seasonal options include a choice of 250-milliliter Tom Ford Beauty fragrances that retail for $2,000 a bottle. Also, as part of the store’s annual collection of what it calls Fantasy Gifts, there is a $65,000 gift package from the fragrance house Maison Francis Kurkdjian that includes a trip to Paris, time with the perfumer and bottles of a custom-blended scent.
Tatiana Birkelund, a Neiman Marcus vice president who oversees the retailer’s beauty and jewelry selection, said the selection reflected her goal “to go more luxurious.”
Ms. Birkelund said that she started speaking with brands about their holiday items nearly a year ago. But many beauty companies work much further in advance, hoping to match how customers will be feeling once the offerings actually hit the marketplace.
When Guerlain started planning its holiday selections about 15 months ago, Ms. Courtois said: “We said to ourselves, ‘We don’t know what’s going to happen.’ To be honest, we didn’t know whether Covid at that time would end — we were all in a kind of gloomy period.
“We were thinking it’s going to be tough,” she added, “and even harder afterwards, but the thing that will remain true is people will need to dream at this period.”