This week, I checked in with top cosmetic chemists and luxury skin-care brands to determine what’s driving luxury skin-care pricing today. Additionally, Youthforia makes a strategic hire to rebound its public perception, Glossier expands its fragrance offering, and the hair mask marketplace sees noteworthy growth.
What’s driving luxury skin-care pricing?
The luxury skin-care market is booming.
According to Circana market research company, the U.S. prestige beauty market grew by 8% to $15.3 billion in the first half of the year, with skin care ranked as the fastest-growing category based on units sold. What’s more, where prestige skin care grew by more than 7% from January to June, mass skin care grew by less than 2% year-over-year.
The U.S. market, despite this growth, is still trailing other key markets like Germany, France, Spain and China, which have seen explosive growth of the prestige beauty category, according to data collected over 18 months by Mintel market research company. For example, Mintel found that, in these markets, beauty is the most purchased luxury category, over clothing and accessories. Meanwhile, the U.S. consumer is still spending more on luxury clothing and accessories than skin-care, showing an opportunity for beauty to usurp other luxury categories stateside.
“Prestige skin care is characterized by its use of high-efficacy ingredients that are not only scientifically proven, but also marketed for their purity, unique sourcing and rarity,” Krupa Koestline, cosmetic chemist focused on clean formulations and founder of KKT Labs, told Glossy.
In her work, some of the most sought-after luxury ingredients include growth factors, like peptides, as well as botanical stem cells sourced from plants, exosomes, retinoids and fermented extracts. Also valued are stabilized forms of vitamin C, hyaluronic acid in varied molecular weights for better penetration and ceramides.
When it comes to luxury pricing of new and noteworthy ingredients, the ceiling seems limitless. Currently, top retailers like Sephora, Neiman Marcus and Violet Grey offer creams and serums from La Mer, La Prairie and Lyma that retail for $655, $1,590, and $655, respectively. This is thanks, in part, to active, fermented or clinically-tested ingredients that show noticeable change to the skin through scientific studies.
“Actives will typically be the most expensive ingredients,” said Laura Lam-Phaure, a cosmetic chemist, former professor and consultant through her company, Lam-Phaure Beauty, which helps brands navigate the formulation process. She told Glossy that, in her work, novel or new biotech ingredients tend to be more expensive than the more commonplace ingredients of the same category they seek to replace, like peptides, retinol or vitamin C.
Sourcing and shipping also deeply impact price, she told Glossy. Shipping from overseas, often required for a unique botanical that will anchor a brand story, increases the price dramatically.
“Clean beauty functional ingredients [also known as clean active ingredients] are more expensive than non-clean beauty functional ingredients because, typically, the non-clean ingredients have been in the industry for a long time, for many decades, and are used across industries,” Lam-Phaure said. This makes them easier to get, while newer ingredients developed for beauty brands avoiding ingredients deemed potentially dangerous to one’s health — often monitored by a consumer through an ingredient-checking app like Yuka — are priced higher by the manufacturers.
But for the most part, it’s not the ingredients themselves that are driving luxury pricing; it’s the testing and transparency, Lam-Phaure said. For example, clinical testing and purity testing of an ingredient and final formulation — as well as verifiable sourcing, including worker rights for those growing, mining or harvesting the ingredients, much of which happens in the developing world — is labor intensive and complicated, therefore expensive.
“There is a shift toward ‘clean luxury,’ where ingredients are not only potent but also sustainably and ethically sourced,” said Koestline. Her clients, in general, like to avoid harsh preservatives, parabens and sulfates. “Bio-identical or biomimetic ingredients, those that mimic natural skin components, are especially trendy because they enhance compatibility with the skin, improving efficacy and reducing irritation.”
Stem cells and growth factors, both of which are designed to regenerate tissue to reveal younger-looking skin, is one luxury ingredient category growing in popularity among luxury shoppers at a rapid speed. As previously reported by Glossy, celebrity esthetician and founder of a 7-year-old namesake skin-care brand, Angela Caglia launched her first stem cell-powered serum in October of 2023 to tap deeper into the luxury market.
The serum sold out three times, each time within an hour, Caglia told Glossy. “The average home value [of users buying this serum] is $12 million, and our subscription rate is 51%,” Caglia said. One year post-launch, sales of the popular Cell Forté Serum, which retails for $395, has equated to $3.5 million of product sold on Caglia’s DTC site alone, her team told Glossy. The serum is also Violet Grey’s top-selling serum since its launch. The brand’s sales are up 250% since the launch and, later this month, she is expanding into 11 Nordstrom doors, as well as online. Caglia’s line also sells at Revolve.
Other popular serums powered by stem cells, growth factors or science inspired by them are a who’s who of the new guard of luxury. For example, brands like Augustinus Bader, Biologique Recherche and Dr. Barbara Sturm each have a hero serum with these ingredients priced at $195, $152 and $535, respectively.
These products, as well as their luxury competitors, also need packaging that supports the ingredients and caters to the clientele investing in them. “More expensive ingredients will need more expensive packaging to live in, especially ingredients that are light- or air-sensitive,” Lam-Phaure said.
“Exosomes and stem cells are among the most expensive ingredients currently on the market,” said Koestline. “They are biologically derived, often from plant cells or human cells, and their extraction, isolation and stabilization require sophisticated technology.”
This is, in part, to a growing understanding of skin care by devoted consumers, who have been dubbed “skintellectuals” online.
“When compared to other luxury ingredients like peptides, gold flakes or rare botanicals, exosomes and stem cells stand out not just for their price but also for their mechanism of action,” Koestline told Glossy. That is, it’s easy to prove they work in testing. “While peptides may stimulate collagen production, exosomes and stem cells can modulate multiple cellular pathways, potentially enhancing tissue repair and regeneration. However, the perceived efficacy and clinical evidence supporting their benefits are critical in justifying their cost and luxury status.”
As the science fueling skin care continues to advance, and transparency around sourcing becomes more table stakes, the cost of luxury skin care could grow, especially as brands begin to trademark their proprietary ingredients made through biotechnology. “A major trend in luxury skin care is the growing use of patented ingredient technology,” said Koestline. “Brands are developing or licensing proprietary active ingredients that not only offer unique benefits but also differentiate them in a crowded market.”
Executive moves:
- Julie Rosen has stepped down from her role as president of retail at Bath & Body Works. The role was eliminated after the company delivered negative year-over-year earnings for the second quarter of 2024 and lowered its full-year outlook.
- LVMH’s Chris de Lapuente, who oversees the conglomerate’s Sephora and Parisian department store business as the CEO of the group’s selective retailing division, is retiring at the end of October. His replacement has not been announced.
News to know:
- Youthforia, the skin-care and cosmetics company that incurred widespread backlash for its darkest foundation shade this spring, is trying to rebound its public opinion. The brand, which rose to fame in 2021 after appearing on “Shark Tank,” has hired Oby Jemedafe as its new product development director. Jemedafe’s CV includes Uoma Beauty color cosmetics and Cecred hair-care. She told WWD she accepted the role for “the chance to be part of a solution.”
- Lashify, the at-home faux lash brand providing competition to the professional lash extension industry with its paneled lashes meant to be applied under the lashline, has won a landmark patent case against the Chinese company Qingdao Lashbeauty Cosmetic Co., which operates as Worldbeauty. A Texas federal jury awarded Lashify over $30 million after finding Worldbeauty willfully infringed on three of Lashify’s patents.
- In the latest fragrance launch to know, Glossier is expanding on its cult You perfume with two new scents: You Doux and You Rêve. They will retail for $78 each DTC and at Sephora starting on October 3.
- Silas Capital, a growth equity and venture capital investor, and Unilever Ventures, the VC arm of the conglomerate, have made an inaugural growth investment in Oak Essentials, the 3-year-old body-care line from designer Jenni Kayne. The details of the investment have not been made public.
- Dermatologist-developed hair-care brand Seen has taken on $9 million in series A funding. Seen was created by Harvard-trained dermatologist Dr. Iris Rubin, taps into the “skinification of hair” trend, and is currently available at Ulta Beauty. Existing and new strategic investors taking part in this round include George Mrkonic, a board director of Ulta Beauty; Sator Grove Holdings; and Somerville SPV led by Feroz Dewan; among others.
- L’Oréal Paris, an official sponsor of Paris Fashion Week, hosted its annual fashion show last week. Stars like Viola Davis, Jane Fonda, Kendall Jenner, Aja Naomi King, Eva Longoria and Andie MacDowell walked the runway in this year’s Le Défilé Walk Your Worth event.
- Ulta Beauty is leaning into the mini toy trend. The retailer partnered with toy company Mini Brands to create limited-edition tiny toy replicas of popular products from E.l.f., NYX, Ouai, Tarte Cosmetics, Supergoop and Urban Decay, among other brands. Mystery bags, each with five collectible toys, will sell for $9.99 at Ulta Beauty starting October 6.
Stat of the week:
The hair mask marketplace — which includes rinse-off, in-shower treatment conditioners of various types — is projected to grow by $86.9 million by 2028, which reflects a compound annual growth rate 3.2% CAGR, according to Technavio market research company. Key factors identified by the firm include premiumization within the category and consumer desire for organic ingredients, like olive and coconut oil, aloe vera, egg, and avocado.
In the headlines:
Self-gifting messaging is set to dominate Black Friday ads. Hairstyles ruling Milan Fashion Week runways had a twist, or more. As reproductive rights headline the presidential campaign, emergency contraception brand Julie expands to Walgreens. Job seekers encounter a ‘brutal and frustrating’ hiring market in e-commerce. Walmart extends holiday deals event in October, upping competition with Amazon and Target. The business of ‘Emily in Paris.’
Listen in:
Carina Chaz, the founder of the 8-year-old genderless fragrance brand DedCool, joins the Glossy Beauty Podcast to discuss selling in Sephora, lessons in brand marketing and a successful expansion into air fresheners, candles and laundry detergent.
Need a Glossy recap?
As Ozempic gains popularity, a skin-care category catering to GLP-1 users is inevitable. Shiseido launches immersive experience at Macy’s to promote its most premium skin-care line. Gen-Z skin-care favorite Bubble expands to Australia. Why Too Faced is leaning into long-form content. London Fashion Week’s runway highlights. At Meta Connect, a host of new mixed reality hardware and AI updates presented by CEO Mark Zuckerberg. Startups use pop-ups to market test new markets and concepts.
