Prestige cosmetics are on the rise: Top beauty trends

The beauty sector continues to grow amid a tumultuous market and weakened consumer spending. Orveon Global CEO Neela Montgomery joins Yahoo Finance to discuss some of the latest beauty trends and new opportunities for growth.

"We're seeing a very strong Q1 in the prestige cosmetics space," Montgomery tells Julie Hyman, adding that prestige cosmetics are growing at a much faster rate than the mass beauty market. Despite tightening consumer wallets, she explains that consumers turn to prestige products for consistent quality, which brands should not lose sight of.

She also highlights the power and influence social media has on the beauty sector, as one viral makeup video could spark an industry-wide sensation causing product sales to surge.

Alongside social media as a powerful tool for the industry, Montgomery points to Amazon as a "force in beauty" that has allowed Orveon's BareMinerals brand to double its sales. Department stores also continue to provide steady growth for beauty brands.

For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Melanie Riehl

Video transcript

The beauty sector has seen growth even among a tumultuous market here.Talk about the latest trends in the industry is the Montgomery Global CEO of or on, which is the parent company of bare minerals and Laura Mercier.Thanks so much for being here.Thank you for having me.Now You guys are a private company, but we have a number of publicly traded beauty companies, and it's sort of been all over the map in terms of what we've been hearing from them.Ulta, the retailer, kind of came out with a disappointing forecast and really shocked many who were covering the company.But then you've had some of the manufacturers and even a competitor like Sephora that have done OK.So what are you seeing in your business amidst that sort of murky environment?Yes, I mean, we're seeing a very strong Q one in the prestige cosmetic space.That's where we typically play, and particularly in this sort of skin, we're very complexion based.So we saw, you know, comps in Q, one that were double digit, strong, double digit and double the rate of category growth.But if you sort of talk about the broader market, and this is a sort of, you know, the lipstick effect that people often talk about in beauty.We are seeing that prestige is growing at a much faster rate than the mass beauty market, I think in Q one, or it was 9% growth versus 2% for the Mass.So those at the higher price points and more luxury positioning and iconic products such as ourselves continue to do well.And that's really interesting, because we have been hearing not necessarily in beauty but sort of across consumer discretionary that some of the lower income consumers are not.They're not seeing as much demand, but it sounds like it's holding up at the upper end.Is that true across geographies as well?It is for us.But then, of course, beauty is often distorted by these viral moments that one has.So we had one in January of this year with our real flawless foundation, which a lady called glam zilla did a post and we had 50 million, uh, 50 million views, 1.5 million likes, and suddenly it's a sensation.And so this is one thing I really love about beauty.You can go from, like trend overnight to this sort of sensational sales mix.And did you guys have a partnership with glam zilla or was she just kind of, you know, in fact, that product, um, had existed for a year?It's a beautiful product.I highly recommend it, but it really speaks to this idea of sort of skin very breathable.24 hours hydration and, uh, a very kind of rough and ready post from glam Zilla who's amazing kind of kicked off not just in the USA, a viral sensation, but globally.And what do you do when that happened?I mean, did you have enough supply to meet the surge in demand that you saw?We Thankfully, we did have a lot of supply from the launch the previous year.Not as much as we would have liked, obviously, because one can't kind of deal with these 500% up surges, but we're now back in stock and shipping globally.But it just shows how powerful platforms like tiktok have become.Yeah, definitely.And you mentioned sort of channels as well.When you've got to ship that out to people, what are you seeing in terms of that in terms of demand through, say, department stores or Sephora versus the direct consumer channel.I mean, beauty has been incredibly resilient in that we are seeing growth in all channels.ECommerce growth is now sort of 12%.But for example, Amazon has become a force in beauty, and we launched bare minerals there last year and have doubled our sales already this year.But alongside that, the specialist channels like you mentioned Sephora Alta continue to do brilliantly and obviously globally, particularly in Asia.We see department stores with double digit growth.That's interesting as well, because that had been a channel that waning in some in some ways, um, you mentioned the prestige is doing well.I'm curious.If there is any price sensitivity right, have you been able to raise prices?Have you gotten any kind of push back from customers, or is it just sort of They're happy to pay it.I think whenever you have iconic products and we have several that have been around for 30 years, like our original loose foundation or our secret camouflage for Laura Mercier, you have to be careful because customers buy you kind of every couple of months.They love your product, and they are very aware of the pricing.But one thing I would say is when you have these heritage iconic products, people really trust you for quality, particularly Laura Mercier or with bare minerals.We see people who want, like no to or limited ingredients five ingredients in our products.So therefore, it's hard to switch, and so you mustn't kind of abuse the customer's trust around that.But you can pass on some inflation, and we have done, uh, we're always very sensitive to what is reasonable for our customers.Right?Nela, Thanks so much for coming in.Thank you.Appreciate it.