Makers of mass-market hair and skin products are heading into new pricing territory: $30-plus for a bottle of skin lotion or hair conditioner that straddles "mass market" and "prestige."
Shoppers, welcome to the world of "masstige" skin- and hair-care products—a retail world where "mass" players like big-box chains and drugstores sell products similar to the "prestige" offerings sold at department stores.
Mass brands from Unilever, L'Oréal, Procter & Gamble, and Johnson & Johnson are boldly pushing up prices to $25 and beyond for products with premium ingredients that target specific problems, selling them alongside traditional $8 moisturizers. Target is taking pricing a big step further, with plans next month to introduce high-end skin-care products including three priced at $55.
F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Retailers selling these new products are trying to up their game and compete with department stores for beauty purchases. Target, Walgreens and Rite Aid have new display areas with better lighting and fixtures and employees trained to answer questions or offer advice. Even so, young shoppers don't necessarily demand such amenities, relying on YouTube video reviews and social media recommendations to steer them to products before they set foot in a store.
Young women "care less about what store they are buying at, and more about the product and the product features," says Virginia Lee, a senior research analyst at research firm Euromonitor. Convenience is key for time-starved shoppers. "Department stores have limited hours and limited locations, whereas your average drugstore is open to 7 a.m. to 10 p.m."
Target's premium skin-care line includes exclusive products such as a $23.99 Borghese face serum. F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Skin care is the focal point as stores clamor for a bigger share of the $12 billion industry. Drugstores, such as Walgreens, sold roughly 13% of all skin-care products in 2012, while mass merchandisers, such as Target, sold about 8%. That compares with 17% for department stores, according to Euromonitor.
To justify the higher prices, many so-called masstige products claim to offer solutions to specific problems. "There's a willingness to pay more to treat that skin because your needs are heightened," says Rob Candelino, Unilever's vice president of marketing for skin care. Unilever's Dove division this month launched two new masstige brands. Dove DermaSeries is aimed at women with extremely dry skin and priced from $7.99 for a cleansing bar to $19.99 for an eczema "therapy cream."
Dove Men+Care's Expert Shave line, meant to address shaving concerns, is priced even higher, ranging from $21.99 for a pre-shave exfoliator to $25.99 for a post-shave "repair balm." Mr. Candelino says the growing interesting in men's grooming has shown men are "less rigid" about price.
"They are much more inclined to say, 'I have a specific need, I want the best quality of product,' " he adds. And the higher price itself is an indicator of quality, he says. "It supports the fact that there is something unique."
F. Martin Ramin/The Wall Street Journal
Next month, Target plans to launch a number of skin-care lines, including newly developed brands and some prestige lines from overseas with a big remodeling of its beauty department. It plans to improve lighting and displays and expand what it calls its beauty "concierge" program, which puts a trained employee in the section.
The beauty business attracts a mix of two desirable shopper types—those replenishing staples, who are valued because they build store traffic, and those shopping on impulse, who are "driven by inspiration," says Christina Hennington, Target's vice president of beauty and personal care. "We see guests buying toilet paper and then come over and browse in beauty for a significant amount of time."
To catch these shoppers' attention, many companies are racing to release new twists on skin-care formulas that were first seen in prestige brands' products, such as last year's influx of BB and CC Creams or the "blur" wrinkle-camouflaging products hitting shelves now.
"We have to have an obsession about being new, better, different," says Malena Higuera, senior vice president of marketing for the L'Oréal Paris brand.
Most masstige products go beyond basic cleansing and moisturizing. Often they offer similar active ingredients like Retinol found in a number of products from Johnson & Johnson's Neutrogena and RoC divisions. P&G's Olay brand introduced some of the earliest masstige brands several years ago, including the Regenerist line of anti-aging products and the Pro-X collection designed by dermatologists.
From Dove's new 'masstige' line for extra-dry skin, an $18.99 rough patch treatment. F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Many drugstores don't have dedicated employees available to explain the complicated benefits, so the masstige product "really has to sell itself," says Michelle Ryan, senior vice president of product development at Garnier, owned by L'Oréal. Garnier aims for clear, simple language with diagrams and color coding.
"Boosts wrinkle repair in just 1 step," reads the box for its Ultra-Lift 2-in-1 Wrinkle Reducer. A small cylindrical timeline at the bottom of the box indicates the product is meant to be used after the "clean" and "treat" steps.
Masstige products are benefiting as more consumers research skin care online. Anissa Dang first learned about L'Oréal Paris's Youth Code line from a YouTube video. At first, the 24-year-old was skeptical about the price tag. "Maybe I should take my $25 and go to Nordstrom or Sephora and get a real beauty cream," she recalls thinking.
But the video review was glowing, and Ms. Dang, who lives in Anchorage, Alaska, sought out the products online and found them at Target for $19.99 each. With the help of some coupons, she bought a serum and a moisturizer for $34, which felt like a bargain compared with department store products and prices, she says.
Mass retailers' hair-care offerings include many brands, including Matrix's Biolage and Unilever's Tigi, that are "authorized" for sale only in salons, but end up in stores through distributors.
Unilever's Nexxus hair-care line sells at thousands of salons as well as in many approved mass retail outlets. The brand's tagline, "Salon Hair Care," has come to mean less about where it is sold and "more a distinction of the quality of the product," says David Rubin, vice president of U.S. hair at Unilever. In recent months, Unilever has introduced a line from hair-salon chain Toni & Guy, including styling products that will be sold in both stores and salons.
"There is a common expectation by many consumers that most products are available in lots of different places," Mr. Rubin says.
It has been more than a decade since Sephora, LVMH's specialty beauty chain, jolted the cosmetics industry with its "open-sell" environment, bringing products out from behind glass display cases so shoppers could handle them and experiment. Ulta, another retail chain, was among the first to put mass and prestige offerings on the same selling floor. In recent years, drugstores have upgraded makeup displays, adding more opportunities to sample products before purchase.
$39.99 MD Complete wrinkle remover. F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
At Walgreens, shoppers browse the range of products, including mass, masstige and those it calls its own "prestige" offerings, says Shannon Curtin, the chain's group vice president and general merchandise manager of beauty and personal care. More than three quarters of its shoppers are female. The variety of beauty products a woman might use mirrors the tendency toward high-low mixing in clothes, Ms. Curtin adds.
Overall, beauty shoppers tend to spend more. At Rite Aid, the market basket, or total purchase size, of the beauty shopper is greater than for the standard customer, says Bill Bergin, group vice president of health and beauty. Higher-priced products don't tend to sell as quickly as lower-priced rivals—nor do they need to.
"At a premium price point," Mr. Bergin says, "you don't need to sell as many units to generate the same sales and profit."
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