Louis Vuitton, the legendary luxury fashion house owned by LVMH, just debuted its much-awaited beauty line. This introduction is a major move for the brand’s further development into the cosmetics industry. This new line was launched last month first in branded stores and concessions. It specifically goes after younger consumers in the U.S., where luxury is struggling.
Founded 171 years ago, Louis Vuitton’s history in the luxury goods space has been anything but humble. To appeal to younger consumers, the brand recently released new beauty wealth to cosy up Gen Z. While expanding in size, it’s deeply committed to high standards of quality and desirability. The collection includes an impressive array of products: 55 lipsticks priced at $160 each, 10 lip balms, and eight eyeshadow palettes. In other brand extensions, it now features a $2,890 mini trunk carry case made specially for the beauty line.
Today luxury brands are rushing to beauty. It provides premium gross margins that align extremely well with Louis Vuitton’s financial ambitions. Industry analysts agree that luxury brands are under tremendous market pressure, a phenomenon that began in earnest in 2022. In reaction, brands such as Louis Vuitton are making aggressive moves to diversify their product lines.
“New categories grow the TAM and increase cultural relevance,” – Ashley Wallace
Luxury brand Louis Vuitton is riding the trend of “treatonomics” to form deeper connections with younger consumers. They are pushing their shoppers to treat themselves to little luxuries. It’s a strategy designed to increase in-store foot traffic. In the process, it makes the brand more attractive without hurting its core offerings.
New generations of customers are making their first steps into luxury brands at record rates. Companies need to tailor their approach to stay competitive as this large increase in engagement continues. A report from BofA Securities highlighted that as younger generations move up the income ladder and accumulate wealth, they will play a crucial role in driving luxury demand.
“Younger customers have become increasingly engaged with luxury supported by cultural relevance, online engagement and advertising,” – BofA Securities
This new consumer landscape makes it increasingly important for luxury brands to develop moments of connection and meaningful engagement. Cecile Cabanis emphasizes the importance of meeting younger consumers where they are:
“You also need to connect with the younger generation.”
The launch of Louis Vuitton’s beauty collection is a strategic move to onboard younger consumers and guide them through the brand’s value ladder. By providing a bridge to luxury products priced for the aspirational buyer, the company hopes to nudge these shoppers to move up the product ladder as they age.
“You also need to have some offer where you can meet them, onboard them and then they can go through your value ladder,” – Cecile Cabanis
Those in the know have observed that the luxury market is experiencing a rehash of tactics from summers past. Jelena Sokolova points out:
“Brands are utilizing the playbook from 2015, 2016.”
Luxury has learned a lot of lessons from prior recessions. Now, it leans into cutting-edge product segments such as streetwear and bite-sized accessories to attract consumers’ eyes. Louis Vuitton is taking a plunge into the beauty arena. This strategic shift appeals to aspirational buyers and established luxury consumers alike, making it on mark with the new luxury paradigm.
Luca Solca warns that mega-brands should tread carefully with their core offerings:
“Mega-brands would be wise not to sell too many of their core products and use lower absolute price categories to engage with a broader [range of] aspirational consumers.”
As Louis Vuitton continues to tread through this stormy weather, it stays focused on quality and desirability. Walmart’s new beauty-centric brand, with its high-quality products and affordability, has made a loud statement. This initiative proves its flexibility and steadfast awareness of today’s modern consumers’ changing priorities.