Style / Beauty & Wellness

How Beauty Completes the Fashion Portfolio For Conglomerates

In fashion’s competitive landscape, brands are one-upping through their beauty arm.

Aug 26, 2022 | By Joseph Low
Dior Forever
Image: Dior Beauty

Large conglomerates are constantly on the lookout for new business opportunities to increase their revenues. One way that fashion brands are expanding their product range is through the creation of a beauty line. From Dior to Chanel and Gucci, major players in the fashion industry have already ventured into the beauty realm with a melange of selections like perfumes, makeup and even skincare. The idea is simple: to provide a complete consumer experience starting with clothes and ending it with a good spritz of perfume.

According to e-commerce growth company, Common Thread Collective, the beauty industry is expected to exceed US$716 billion by 2025 and US$784.6 billion in 2027. With an annual compounded growth rate of 4.75 per cent worldwide, it is unsurprising that brands are launching their own beauty products to have a slice of that huge pie.

Not everyone has the monetary means to buy a Hermès Birkin but getting your hands on the latest lipstick from the brand seems more plausible. For high-fashion brands, the beauty line has the lowest barrier to entry and gives the opportunity for consumers to be part of the brand’s universe. Many customers who cannot afford items of clothing from such fashion brands opt to purchase their makeup items which in turn keeps sales within that brand. Not only do luxury fashion brands stand to gain a steady stream of revenues, it also helps to improve both brand awareness and loyalty, which in the long run could establish a strong consumer base.

Examples include Dior, which has its own makeup line that are used exclusively for its models during fashion week. At Loewe, the Spanish luxury brand debuted its first perfume collection under creative director Jonathan Anderson in 2016 and since created other ranges that were inspired by colours of the rainbow and a vegetable garden.

The successes of these fashion brands have proved to be a lucrative business opportunity for others to follow. French conglomerate Kering has recently hinted at the idea of beefing up its fashion brands’ beauty lines. Jean-François Palus, the group’s managing director, said in a press conference after the release of the H1 financial result, “Regarding beauty, it is a natural extension of our brands’ territory, and you know that currently, we operate under a license model.”

“But our success with Kering eyewear demonstrates that we can create a lot of value for the brands, on the one side, and as a consequence, for the group, by taking some disruptive and innovative approaches,” he continues. “So beauty is definitely an area where we could contemplate some initiatives in the future, and all options are open.”

Chanel Beauty
Image: Chanel

Furthermore, beauty products make up one of the largest product categories that drive engagement on social media platforms like Instagram, TikTok, Youtube, Twitter and Facebook. Often time, content creators serve as the first point of contact for consumers looking to buy a new product. As technology advances, brands are also looking to explore other avenues like going into the metaverse and this move aims to attract the younger demographics like millennials and Gen Zs. Undeniably, the young spenders of tomorrow are the ones who will be the biggest drivers for profits and it is pertinent that brands engage with them more frequently.

Traditionally, beauty trends have been born from runway shows where makeup artists work to bring a designer’s idea to life. While there is room for creative freedom, these markup artists also have to ensure that they follow the set theme with the aim of leaving the audience in awe. To aid fashion and beauty enthusiasts with recreating the looks, behind-the-scenes footage of global fashion week are released on the brand’s social media and these act as mini-masterclasses.

Other than the business aspect, building a fashion brand’s beauty line further drives home the point of individuality. Fashion has been a moniker for self-expression and individuality, and likewise for beauty through the use of makeup and fragrances and even hair. While the former uses clothes as a vehicle, the latter achieves this through the colours of one’s eyeshadow or lipstick.

A study by McKinsey & Company found that for the new generation of consumers, consumption should be a true expression of individuality identity. They are becoming more interested in companies that support their desire to embrace their uniqueness and flaws. Their passion for beauty has evolved into a genuine form of expression for their creativity. And if brands are able to successfully meld the two together, it would be a winning combo.

As companies start to realise the importance of having a beauty line, more brands will embark on this new venture to not only earn more profits but also align with the shifting consumer tastes within the new generation of spenders.

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