Prices for just about everything are soaring, from beef to furniture to airline tickets. A gallon of gasoline can run as much as $6 a gallon in some parts of the United States.
Lime Crime is bucking the trend. Last week, the beauty brand announced that it is slashing its colour cosmetics prices. Lipsticks that once cost between $18 and $20 now running from $14 to $15, while its Sunkissed Glimmering Skinstick, a highlighter, went from $25 to $15.
The Los Angeles-based brand hasn’t found a previously-unknown workaround to global supply chain problems, or a secret stash of cruelty-free eyeliner. Rather, the pricing move is part of a wider rebranding that aims to more firmly cater to Gen-Z’s tastes, said Andrea Blieden, Lime Crime’s chief executive.
That means selling products at more affordable prices, and at more affordable retailers, like Target and Walmart, which have been doubling down on beauty in an effort to go up against specialty beauty stores.
“It’s actually a pretty complex thing to make happen when you’re already in retail distribution,” said Blieden. “But for us, it wasn’t as much as selling it, it was showing how the brand wasn’t targeting our target audience before.”
Lime Crime isn’t alone in heading downmarket: Hair care brand Rita Hazan is also moving away from its prestige positioning and launching in Walmart this year, while Halsey’s beauty brand, About-Face, dropped its prices at the end of April. Rephr, a beauty brand that sells makeup brushes and skin care products, is planning to drop prices later this year.
These brands are still outliers in the beauty space. Average prices for beauty categories such as skin care, fragrance and shaving have all increased from 2020 to 2022, with some types of products seeing increases of as much as 12 percent. Beyond that, more consumers are open to paying more for beauty products. Ultra-luxury beauty brands, in categories from lipstick to hair care to fragrance, are having a boom moment.
Appealing to the mass market offers brands access to more consumers, and offers a way to recoup business lost during the pandemic, but also can lock a label into a race to the bottom with similarly low-price rivals. For Lime Crime, the move is part of a reinvention that has played out since it was acquired by a private equity firm in 2018, after a series of controversies that sullied its reputation with many consumers who were willing to pay a premium for its brightly-packaged and quirkily-named products. Today, the brand looks very different than it did when it was acquired: Hair care represents 70 percent of its business, in 2019, it was just 15 percent. Its partnership with Ulta, which saw its colour cosmetics sold in 450 doors in 2019, has now relegated its cosmetics to online-only, though hair products are sold in both.
The decision to move into more affordable retail (which was first made back in 2020), as well as the increased focus on hair care, is another way to establish a new identity and hopefully, propel growth.
“They may have made the strategic decision that their best positioning for the rest of time is as affordable luxury and that they get themselves that much broader addressable market of mass and value, where their current brand cachet might take them a little further,” said Jason Goldberg, chief commerce strategy officer at advertising company Publicis.
Moving Towards the Masses
Lime Crime launched in 2008 with ultra-bright packaging and products with names like “Unicorn Hair.” The company has repeatedly courted controversy, including when photographs resurfaced online soon after the brand’s launch of founder Doe Deere (real name Xenia Vorotova) wearing a Hitler costume on Halloween. In 2014, she sued Michelle Jascynski, who wrote a blog called Doe Deere Lies about the company’s controversies, for damages to her reputation and lost sales, according to Vox. In 2015, the US Food and Drug Administration issued Lime Crime a warning letter over the possible inclusion of a banned ingredient in one of its products. (The brand said the ingredients were listed on the packaging but not actually incorporated into the product.)
In 2018, Deere stepped away from the brand after it was acquired by private equity firm Tengram Capital Partners, who appointed a new leadership team. Blieden was named to the chief executive post in May 2020. In May 2021, it underwent a brand revamp, pivoting its marketing to focus more on its “brand values,” including creating cruelty-free products and encouraging consumers to express themselves with bold makeup and hair looks.
The move to drop prices is the next step in that evolution. The brand, which began as one of the first digitally-native beauty brands and developed a cult following through platforms like LiveJournal, is now decidedly mass market. In February it rolled its products out to Walmart and Target, where before it sold mainly through its own digital channels and a few partners, including Ulta, Urban Outfitters and Revolve. To go up against ultra-affordable brands in big-box stores, the prices had to come down, Blieden said.
A lower price point comes with a big benefit: greater exposure.
“It opened our eyes, that this could be a whole different business,” said Rita Hazan, the founder of her eponymous hair colour line, who has made tweaks to her products, such as using a less expensive fragrance, to be able to sell them at a mass price point. “Mass is tremendous. Sephora has [around] 400 stores, Walmart has like 4000. It’s a whole different ball game.”
For Lime Crime, the renewed focus on hair care has also played a part in its arrival at stores like Walmart. Being a go-to purveyor for brightly-coloured hair dyes, Blieden said, will help the brand stand out in crowded mass retail shelves.
“The most critical piece for us is always standing behind colour,” she added. “We are not the brand that is ever going to create any skin perfecting product.”
Lowering Costs Without Losing Allure
Going mass — and embracing a mass price point — may have its advantages, particularly in the short term, where a brand can turn its price cut into a marketing moment. (A banner on top of Lime Crime’s website declares there’s “No price on creativity — we’ve dropped our prices!”) Particularly in an inflationary economic environment, dropping prices sets brands apart from the labels doing the opposite.
But after this moment passes, doing so could have a negative impact. Once a brand drops out of the prestige category, it’s hard to go back.
“The decision to decrease prices could weaken the perception of efficacy or quality,” said Clare Hennigan, senior global analyst for beauty and personal care at Mintel, adding that 45 percent of consumers believe luxury products are higher quality. “Brands that significantly decrease prices risk alienating highly engaged, efficacy-driven consumers.”
Lime Crime, which has essentially spent the past four years working to rebuild its reputation, may have found that competing against the giants in prestige beauty, seemed like a fruitless effort, particularly as they turned their attention to younger consumers with less-deep pockets.
“For a brand like Lime Crime, where we are in the masstige world but not priced correctly for that, it makes sense for us to do it, no matter what’s happening in the economic landscape,” said Blieden.