New role of budget, diffusion beauty brands cited

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Luxury and premium brands can capitalize on the success of budget beauty by creating accessible diffusion lines to cater to a new cohort of consumers, according to trend forecaster WGSN.

In a sample report, WGSN said beauty brands are challenging the idea that premium products are expensive amid inflationary pressures, budget and diffusion.

“Diffusion beauty lines have been difficult to sustain in the past. Ongoing inflationary pressures and growing opportunities in the mass beauty space will see a resurgence of brand subsidiaries with a new approach and a more willing consumer,” it said.

The report underscored the importance of collaborations with retailers to reach the target audience.

It cited Daiso which has collaborated with 14 brands, and beauty sales have surged by 70 percent, garnering success with Gen Z and Alphas.

“Substantial cost savings, quality and efficacy will appeal to value-driven consumers,” it added.

WGSN advised firms to avoid devaluing the mainline brand by retaining its core values while creating a diffusion beauty range with its own identity, product designs, formulations, and pricing structures.

“It cannot simply be a ‘dupe’ or a watered-down version of products,” it said.

The report said US Goop’s affordable skincare and wellness brand good.clean.goop has a separate brand identity, website, social channels and retail structure, which appeals to a younger and more mainstream audience and creates a point of difference from Goop.

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