Have you ever walked past a luxury boutique, caught a glimpse of a dazzling display, and wondered how brands keep their sparkle during tough economic times? It’s no secret that the luxury sector has hit a rough patch, with consumers tightening their belts and rethinking big-ticket purchases. Yet, some of the world’s most iconic brands are pulling a clever trick: they’re diving into new, more accessible product categories like $160 lipsticks and $1,400 bag charms to keep shoppers coming through the door. This isn’t just about surviving a slump—it’s a bold move to redefine what luxury means in 2025.
Why Luxury Brands Are Reinventing Themselves
The luxury market isn’t what it used to be. After a post-pandemic spending spree, brands are grappling with a slowdown that’s left even the most prestigious names scrambling. Rising costs, U.S. tariffs, and a dip in consumer confidence—especially in key markets like China—have forced industry giants to rethink their approach. Instead of doubling down on $10,000 handbags, they’re betting on smaller, more affordable items to capture a broader audience.
Luxury brands are adapting to a new reality, balancing exclusivity with accessibility to stay relevant.
– Industry analyst
In my view, this pivot feels like a breath of fresh air. It’s as if these brands are saying, “You don’t need to drop a fortune to feel luxurious.” By introducing products like lipsticks and bag charms, they’re inviting a new crowd—think younger, trend-savvy shoppers—into their world without compromising their prestige.
The Rise of Beauty in Luxury
One of the most exciting shifts is the leap into beauty products. Take, for instance, a certain French luxury house that recently launched a collection of 55 lipsticks, 10 lip balms, and eight eyeshadow palettes. Priced at $160, these lipsticks aren’t exactly drugstore finds, but they’re a steal compared to a $3,000 handbag. And with a renowned makeup artist steering the creative helm, the brand is banking on her loyal fanbase to drive sales, especially among younger U.S. consumers.
Other brands are following suit. Names like Prada and Celine have rolled out their own cosmetics lines, while Miu Miu is reportedly gearing up to join the party. Why beauty? For one, it’s a high-margin category. A tube of lipstick might cost pennies to produce but can command premium prices thanks to the brand’s cachet. Plus, it’s an easy entry point for shoppers who dream of owning a piece of luxury but can’t yet afford the flagship items.
- High margins: Beauty products offer strong profitability with lower production costs.
- Broader appeal: Cosmetics attract younger, aspirational buyers who may later upgrade to pricier items.
- Cultural relevance: Collaborations with celebrity makeup artists boost brand buzz.
I can’t help but admire the strategy here. It’s like offering a taste of champagne to someone who can’t yet afford the whole bottle. These brands are playing the long game, hoping today’s lipstick buyer becomes tomorrow’s loyal handbag collector.
Bag Charms: The New Status Symbol?
Then there’s the craze for bag charms. If you’ve been on social media lately, you’ve probably seen those adorable Labubu keychains dangling from designer bags. Brands like Coach, Longchamp, and even Louis Vuitton (with a jaw-dropping $1,420 option) are cashing in on this trend. These playful accessories are more than just cute—they’re a perfect example of treatonomics, where shoppers splurge on small luxuries to feel special without breaking the bank.
Picture this: a vibrant, plush charm swinging from a sleek handbag during Copenhagen Fashion Week. It’s eye-catching, fun, and screams individuality. For brands, these charms are a low-risk way to tap into the youth market while keeping their high-end image intact. They’re also a nod to the streetwear vibe that took off a decade ago, when sneakers and smaller bags became must-haves.
Small accessories like bag charms let consumers indulge in luxury without the hefty price tag.
– Fashion industry expert
Honestly, I find this trend oddly charming. It’s like adding a quirky pin to a tailored blazer—small, but it makes a statement. And for brands, it’s a genius way to keep their products in the spotlight.
Why Diversification Matters Now
The luxury sector’s current challenges aren’t just a blip. Since 2022, the industry has been reeling from a post-Covid comedown. Consumers, burned by steep price hikes, are pushing back. Add to that U.S. tariffs and a sluggish Chinese market, and you’ve got a perfect storm. So, brands are dusting off a playbook from the mid-2010s, when they leaned into streetwear and accessories to weather a similar dip.
Back then, the strategy worked. Millennials flocked to limited-edition sneakers and quirky handbags, boosting brands’ cultural relevance. Today, the focus is on new categories like beauty and accessories to expand the total addressable market (TAM). It’s a fancy term, but it just means reaching more people—especially younger shoppers who are just starting to dip their toes into luxury.
| Category | Price Range | Target Audience |
| Beauty Products | $50-$200 | Younger, aspirational buyers |
| Bag Charms | $100-$1,400 | Trend-savvy consumers |
| Flagship Items | $1,000-$10,000+ | Affluent, loyal customers |
This approach isn’t just about survival—it’s about growth. By offering lower price points, brands can hook new customers who might stick around as their incomes rise. It’s a bit like planting seeds for a future harvest.
Balancing Exclusivity and Accessibility
Here’s the tricky part: how do you make luxury more accessible without losing that exclusive edge? Brands like Burberry and Gucci learned this the hard way. Heavy discounting in the past diluted their prestige, leaving them scrambling to win back high-end shoppers. The lesson? Diversification has to be strategic.
Today’s approach is smarter. Brands are rolling out accessible product categories like perfumes, eyewear, and small leather goods alongside their premium offerings. This way, they cater to both aspirational buyers and their core affluent base. It’s a tightrope walk, but when done right, it can pay off big time.
Luxury is about aspiration, but it also needs to feel attainable for new generations.
– Consumer trends analyst
I think this balance is what makes the current wave of diversification so fascinating. It’s not about cheapening the brand—it’s about inviting more people to the party while keeping the VIP section exclusive.
Engaging the Next Generation
Let’s talk about the real prize: younger shoppers. Millennials and Gen Z are reshaping the luxury landscape. They’re drawn to brands that feel culturally relevant, whether through social media buzz or collaborations with influencers. By offering products like $160 lipsticks or quirky bag charms, brands are speaking their language.
These younger consumers might not have the budget for a $5,000 bag yet, but they’re happy to splurge on a small luxury that fits their vibe. Over time, as they climb the income ladder, brands hope they’ll stay loyal. It’s a long-term investment in brand loyalty, and it’s backed by some solid logic: younger generations will soon control a bigger slice of global wealth.
- Cultural relevance: Engage through social media and influencer partnerships.
- Accessible entry points: Offer products that fit smaller budgets.
- Long-term loyalty: Build relationships with consumers who will grow into higher spenders.
Perhaps the most exciting part is how these brands are using cultural moments—like fashion weeks or viral trends—to stay in the conversation. It’s a reminder that luxury isn’t just about products; it’s about storytelling.
Will This Strategy Work?
So, can $160 lipsticks and $1,400 bag charms save the luxury industry? It’s too early to say for sure. The strategy worked a decade ago when brands leaned into streetwear, but today’s economic pressures are different. Consumers are more cautious, and aspirational buyers are especially sensitive to economic ups and downs.
Still, there’s reason to be optimistic. By expanding their total addressable market and staying culturally relevant, brands are laying the groundwork for future growth. It’s not just about surviving the slump—it’s about thriving in a new era of luxury.
The brands that adapt to changing consumer needs will come out stronger.
– Retail strategy expert
In my experience, the luxury market has always been about evolution. Whether it’s embracing new categories or redefining exclusivity, the winners are those who listen to their customers. Right now, that means offering a little glamour at a price more people can afford.
What’s Next for Luxury?
As we move deeper into 2025, expect more brands to experiment with new categories. From fragrances to eyewear to tech-inspired accessories, the possibilities are endless. The key will be staying true to their core while inviting new faces to the table.
Maybe it’s a $160 lipstick today, but who knows? A decade from now, we might see luxury brands diving into entirely new territories—think sustainable fashion or even virtual reality experiences. Whatever comes next, one thing’s clear: luxury is no longer just for the elite. It’s for anyone who wants a taste of the extraordinary.
What do you think—will these new offerings spark a luxury revival, or are they just a flashy distraction? One thing’s for sure: the industry is keeping us on our toes.
