Key Takeaways:
Luxury beauty finds itself at a crossroads. On one side, consumers are tightening their spending, scrutinizing every purchase, and leaning toward brands that can prove their value. On the other hand, conglomerates and niche players are pushing the boundaries of price and exclusivity, betting on the resilience of prestige beauty as a category that defies economic headwinds. The signals are mixed. In the US, reports show that the top 10% of earners account for 49.7% of all spending. Hermès reported a 9% rise in overall sales in Q2, but its perfume and beauty arm slipped 7.2% for the first time since launch.
Meanwhile, Amouage, a fragrance house positioned firmly in luxury, saw growth of 60% in the first half of the year. Despite widespread talk of slowdowns in luxury, the beauty category continues to defy gravity. Global conglomerates are pushing pricing boundaries even as inflation weighs on consumer wallets and brands scramble to stay relevant. Nowhere is this more evident than at LVMH, which recently unveiled a new makeup line that has left the industry buzzing, with 55 lipsticks and 10 balms, each priced at $160, alongside eyeshadow palettes at $250. The collection nearly doubles the entry set by Hermès’ $80 Silky Lipstick in 2020, surpasses Clé de Peau Beauté’s $113 Precious Lipstick, and leaves Chanel’s $50 offering far behind. In fragrance, Maison Francis Kurkdjian’s $25,000 launch further amplified the sector’s appetite for pushing the envelope.
These contrasting fortunes highlight a market in flux. For some consumers, small indulgences are under pressure, while for others, ultraluxury remains irresistible. Understanding who is buying, why they are buying, and how brands are justifying their strategies is key to decoding beauty’s next chapter.
The Evolving Definition of Luxury Beauty
“The definition of luxury beauty has evolved significantly,” Olivia Houghton, Beauty, Health, and Wellness Lead Analyst at The Future Laboratory, said to BeautyMatter. Where once luxury was tethered to packaging and prestige, today’s consumers seek more holistic value that isn’t shy of sustainability, craftsmanship, provenance, and experiences that resonate beyond the surface. According to Houghton, “The next generation of young luxurians prioritize luxury as a status signaled through craftsmanship and authenticity,” and this is increasingly expressed through beauty categories that emphasize longevity and wellness.
Jessica Matlin, Director of Beauty and Home at Moda Operandi, explained that luxury is often more emotional than definitional. “‘Luxury beauty’ is a subjective term,” she told BeautyMatter. “What defines a true luxury product is up to the consumer. It’s not a ticklist of specs, but something more emotional or sensorial.” This emotional charge is why beauty remains a potent entry point into luxury, even amid broader economic uncertainty.
Consumers are indeed becoming more selective, said Addison Cain, Senior Insights and Marketing Lead at Spate. “Affordability has emerged as a dominant theme,” she told BeautyMatter, citing a +31.6% increase in consumer interest in affordability-related topics across search and TikTok in the past year. Skincare routines, lash serums, and lip plumpers dominate these conversations, indicating a consumer base that is simultaneously seeking value and indulgence.
This bifurcation is reflected in sales data. Hermès 9% overall growth in Q2, but 7.2% decline in perfume and beauty categories, contrastingly paired with Amouage’s 60% growth in the first half of the year, is a stark indication. Such divergence reveals the nuances of who is buying. While some are trading down or delaying purchases, others are doubling down on ultraluxury products as badges of identity. For Houghton, this is about a shift from possessions to experiences. “In today’s cost-conscious climate, indulgence must feel both justified and memorable,” she explained. Products that stimulate the senses, surprise the user, or deliver cultural distinctiveness have a greater chance of success than static, homogenized offerings.
Pricing Power and Polarization
Even as consumers demand value, luxury beauty brands continue to escalate prices. Experts suggest this is less about opportunism and more about reinforcing positioning. Houghton pointed to The Future Laboratory’s “Accredited Beauty” trend, where brands lean into credentials, research, and certification to validate their premium status. “Despite stagnation in the mass market, prestige beauty continues to grow,” she said, with US prestige sales up 8%, while the mass category remains flat.
Yet, the risk of overreach is real. “Pushing pricing too high can overshadow a brand’s launch so much that the price becomes the story,” warned Matlin. “That can eclipse the product itself and alienate aspirational consumers,” she added.
Polarization has also become more pronounced, with ultra-premium launches on one end, and “affordable luxury” innovations on the other. Cain pointed out the growing interest in accessible formats like travel-sized products and wallet-friendly extensions such as hair perfumes which grew by 6.1% and 50.1% year over year (YoY), respectively. These allow aspirational consumers to buy into luxury at lower stakes while preserving brand equity.
However, with consumers scrutinizing purchases, staying relevant requires more than high price tags. Matlin emphasized the importance of human connection. “It’s making the customer feel seen. For some, it may be as simple as being in touch with them on social media,” she said. For others, it may be an in-store, in-person moment. Any sort of small expression of appreciation is going to stand out.”
Storytelling also remains central. Houghton highlighted the role of heritage, provenance, and craftsmanship, which are amplified through immersive retail experiences or digital tools like product passports. Meanwhile, Cain stressed the importance of timely engagement with cultural trends while maintaining authenticity. Innovation also further drives differentiation. Multisensory products, advanced diagnostics, and longevity-focused formulations are expanding the value proposition of luxury beauty. As Houghton observed, the sector is moving from “aesthetics to transformation,” positioning beauty as a pathway to well-being, healthspan, and fulfillment.
Lessons from the Wider Luxury Sector
Luxury beauty can draw lessons from fashion, jewelry, and hospitality, where the interplay between exclusivity and access has long defined market strategies. In fashion, tiered offerings allow consumers to participate across price points without diluting brand prestige. Jewelry thrives on provenance and craftsmanship, reinforcing narratives of heritage and quality. Hospitality demonstrates how service and experience can elevate even modest offerings into luxuries.
Beauty is increasingly borrowing from these codes, evident in bespoke services, immersive retail spaces, and limited-edition collectibles. Matlin pointed to Moda Operandi’s success with La Bonne Brosse hairbrushes, a functional product elevated through craftsmanship and storytelling, creating a pragmatic yet luxurious proposition.
Looking forward, luxury beauty is poised for further divergence. On one end, ultraluxury will continue to raise eyebrows, whether through $160 lipsticks or five-figure fragrances. On the other, affordable luxury will flourish as consumers seek small indulgences that deliver resonance and escape. The next era, experts agree, will be defined less by aesthetics, and more by transformation. “Beauty will be to the luxury industry what fashion has been since the 90s: the driver of change,” said Houghton. With well-being, personalization, and science-driven innovation at the forefront, beauty is positioned not just as a marker of status but as an instrument of identity and longevity.
For now, the luxury beauty sector remains resilient, not in spite of its high prices, but partly because of them. Price tags, whether $50 or $25,000, are not simply about cost, but are signals of aspiration, belonging, and value. As consumers navigate uncertainty, the question is not whether luxury beauty can sustain its pricing power, but how it will evolve to justify it.
