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L’Oreal Luxury Brand Serving the Post-Recessionary Affluent Market

After a sharp drop in global demand for luxury cosmetics following the economic recession, sales of premium brands now appear to be recovering. L’Oreal, the world’s largest cosmetics firm, reported higher than expected profits of £1.2bn in the first half of 2010, and in addition displayed its fastest pace of organic growth for three years, both of which were driven by accelerated sales of its luxury lines. This article will examine the ways in which L’Oreal’s premium brands have responded to the changing demands of a “new” affluent consumer base, and in doing so have achieved market success amid a post-recessionary landscape.

Following last year’s spending slump, the latest sales figures suggest that consumer demand for luxury cosmetics is on the rise. Although wealthier consumers are out shopping again, a shift in their brand values following the recession has served to redefine the concept of “luxury.” Affluent consumers are moving away from conspicuous consumption, and instead are searching for brands that are innovative and authentic, while providing a unique brand experience.

L’Oreal, the world’s largest cosmetics maker, has bounced back from the global economic crisis, with higher than expected first-half profits that were driven by its professional and luxury divisions. Sales of brands such as Yves Saint Laurent (YSL) and Lancôme were up nearly 10% in the first six months of 2010, making L’Oreal’s premium brands the company’s star performers.

L’Oreal’s recent success in the luxury cosmetics division largely stems from the ability of its premium brands to meet the changing needs of the affluent consumer base. Through product innovation and investment in digital marketing and social media, L’Oreal’s premium brands are providing consumers with more bespoke product offerings. Following L’Oreal’s success, many other premium cosmetics brands look set to capitalize on the luxury cosmetics market during 2011.

For more information on L’Oreal check out the MarketLine business Case Study – L’Oreal Luxury Brand Case Study: Serving the Post-Recessionary Affluent Market. You may also check out our Buy Reports section for thousands of other company, industry & country analysis reports.

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