Is the future of beauty retail a low-cost, high-quality strategy?

DECIEM beauty retail products

DECIEM beauty retail

A few things happened within the last two weeks, which seemed disconnected but actually tell an interesting tale about the future of beauty retail. First, the Wall Street Journal wrote this article called The Cosmetics Counter Was Long Immune to Discounting. Not Anymore, which revealed how high end US department stores have started to do something that was previously unheard of: discount beauty products. Then this week, our beauty editor in London, Emma Grace Bailey attended  the new brick and mortar store in Covent Garden Market for Deciem, The Abnormal Beauty Company. Beauty conglomerate DECIEM and The Ordinary which is part of its portfolio, as we mentioned here, is changing the way we think about beauty by charging low cost prices: think £10 for products that include ingredients like retinol, vitamin C, hyaluronic acid and zinc. This same week, Glamour magazine reported on a new stateside brand called Brandless, a no-frills beauty site based out of tech city San Fran, where the product offerings for everything cost just $3.

It’s clear that this huge shift is being led in part by changing consumer habits (consumers expect discounts as the norm now), but also by savvy beauty insiders and tech specialists who are successfully rewriting the beauty retail model. DECIEM is founded by entrepreneur Brandon Trauxe, who worked in the beauty industry and saw first hand how much products were marked up. While the company tagline for Brandless is “Who says better needs to cost more?”

And so, it got us thinking at WGSN Insider that if affordable brands like DECIEM are transforming the beauty industry and attracting consumers, while department stores are discounting heritage beauty brands, what does this mean for the future of beauty retail?

We got in touch with another beauty brand innovating in this space called 3ina Cosmetics, which launched last year. The cosmetics line was founded by Pablo Rivera (the former Head of International Expansion for fashion brand New Look) and Mark Eve (former Littlewoods and New Look executive).  3ina prides itself on creating luxurious formulas at an honest price and they’ve disrupted the beauty model by speeding up the supply to market. This brand formula is hugely successful and shows no sign of slowing, since last year’s launch, 3ina is already in 16 markets and counting.

Co-Founder Pablo Rivera explained: “Consumers want high quality products that are easy to use. Affordable and high quality so that they can take part in the latest trends and feel free to express themselves as they wish… Our growth has been double digit exponential and to be honest has really taken us by surprise, particularly on our campaigns and collections which our customers love and collect. We are their authority on trend and colours. We don’t follow a traditional marketing or retail calendar…so we launch campaigns about 3 or 4 times a year which capture the mood, what we call the 3ina moment. And we can introduce new products within four months from conception to our customers hand.”

What Rivera realised pretty earlier on from his long fashion stint, is that the beauty consumer and the fashion consumer are very similar. And, if you are paying less for your clothing, why would you still pay premium prices for your beauty and skincare? Early beauty disruptors like Birchbox, which launched in September 2010, were able to show consumers that high cost beauty doesn’t have to be the norm. The £10 Birchbox which delivers new product samples to your door, helped the consumer to realize he or she didn’t have to spend £60 to £100 on a serum to see if it worked.

Next came brands like Glossier and Bleach London with their affordable price points. And so, it makes sense that these new brands are the latest iteration of innovation in the beauty space, and they have no plans to slow down. In January of this year, our Senior Beauty Editor Theresa Yee blogged about how 2017’s new must-have beauty products didn’t just focus on better nail polish finishes, or nicer smelling ingredients, they were all about changing up the industry, rewriting the distribution model, and the beauty brand to consumer relationship rules.

So how do brands compete in this brave new beauty world?

“Consumers are wising up to the reality of beauty, becoming more aware of the actual cost of ingredients and therefore the mark-up they’re incurring by investing in some of the top brands,” explains WGSN beauty editor Emma Grace Bailey.

“When it comes to the future of beauty, brands should realise that it’s about efficacy and transparency. In a world that’s becoming more confusing and conflicted by the moment, consumers are seeking truth and honesty to counteract the darkness, and this applies to the brands consumers choose to invest in too. There is a demand for products that actually work, and are honest about exactly what they do and how they do it – which is why brands such as Deciem have captured the market’s attention. Offering high performing products at ‘normal people’s’ prices, they’re attracting a loyal following of consumers who respect them for being fair. Your brand ethics, your brand statement and a transparent explanation of the cost breakdown (much like that which we’re seeing in the fashion retail space) matters now more than ever.”


Know what’s next. Become a WGSN member today to benefit from our daily trend intelligence, retail analytics, consumer insights and bespoke consultancy services.