Top end cosmetics are still piquing consumer interest in the country which traditionally favours such goods, while are consumers attempting to keep costs low by also turning to budget brands, with mid-range products being overlooked in this polarising of preference.
“A substantial proportion of the Italian population are still very interested in high-quality products and premium brands, while the majority of Italians are increasingly looking for better value for money,” analysts with the research firm note.
‘Increasingly price-sensitive’ consumers
With consumers looking to cut costs in the face of financial uncertainty resulting from falling disposable incomes, brands have lately been forced to offer price promotions and low-value cosmetics items.
This has shored up the dominance of super- and hypermarkets as retail outlets for beauty brands; though pharmacies, increasingly seen as the retail space offering the best value for money, saw a rise in sales while supermarket value shares lessened.
Euromonitor suggest brands innovate multifunctional products with added-value if they now want to avoid unsustainably diminishing profit margins.
“The only way to increase margins has been to offer innovative products which provide higher levels of functionality, including multipurpose products, which are generally sold at higher unit prices,” observe the firm’s analysts.
Premium in favour
With all this focus on the lower-rungs of the cosmetics retail space in response to the uncertain economic situation, it is perhaps surprising that the premium and luxury categories have enjoyed growth too.
The rise can be attributed, the analysts suggest, to an Italian perception of some luxury purchasing as necessary consumer behaviour: “Small domestic players which produce high quality products within Italy are gaining share thanks to the perception that they offer superior quality,” notes the firm.
As to where the market will head next, Euromonitor says the future is uncertain, predicting a consolidation of the polarised spending on beauty.
“The majority of Italians are set to continue searching for better value for money, while others are expected to remain loyal to their favourite premium products,” the analysts conclude.