Is it just me, or does it seem like luxury skincare brands have multiplied like rabbits over the last few years? Augustinus Bader, Clé de Peau Beauté, The Ginza, MBR, La Mer, La Prairie, 111SKIN, Sisley Paris, and the list goes on. Walk into the skincare section of an upscale department store and you’re surrounded by them. Or just pass through the duty-free store at any international airport in the developed world.

I’m not talking about the merely expensive skincare products here; I’m talking about the hyper-expensive, where a single 50 ml (1.7 oz) bottle of a product can cost over 1 000 € ($1,157).

The question I have is this: What do you get for the prices the luxury skincare brands charge? What do they claim they do, what evidence do they provide for their claims, and how do they justify what they charge? This is fascinating on multiple levels: not just the obvious question, “what if luxury skincare products are meaningfully better than cheaper alternatives and so better skin is just a purchase away?” but also, “is the luxury skincare market a nearly pure example of Veblen goods¹ in action?”

Let’s start with pricing, because honestly, it may shock you. It did me.

Start with a well-regarded mass-market skin cream: say, CeraVe Moisturizing Cream. At $17.99 for 16 fl oz, that’s $1.12 per fl oz or 0,033 € per ml. Now let’s take a well-known luxury skin cream: say, La Prairie Skin Caviar Luxe Cream Sheer. It’s $610 for 1.7 fl oz, or 10,68 € per ml. That’s a price ratio of 321:1. By volume, you’re paying 321 times as much for La Prairie as you are for CeraVe.

But wait—we’re not done yet.

Let’s start with a cheaper but still well-regarded mass market skin cream, in this case, Cetaphil Moisturizing Body Cream. It sells for $13.49 for 16 fl oz, which is $0.84 per fl oz or 0,025 € per ml. Now let’s take an extremely high-end luxury skin cream, 111SKIN Black Diamond Cream, which sells for $995 for 1.7 fl oz, or 17,42 € per ml. That’s a price ratio of 686:1.

In other words, 111SKIN is charging not one order of magnitude (10x), not two orders of magnitude (100x), but nearly three orders of magnitude (1,000x) as much as a mass-market skincare product.²

How do La Prairie and 111SKIN justify their pricing?

La Prairie says their product is enabled by more than 30 years of “caviar science” and that it includes “fragmented caviar PDRN” (polydeoxyribonucleotide), which consists of “highly advanced components from caviar newly decrypted by La Prairie scientists”. As for 111SKIN, they say their product contains “Everlasting Flower Extract” and “Everlasting Plant Extract”, which “mimics the biomimetic cellular ageing reversal mechanisms of the resurrection plant to rejuvenate the skin at different cellular levels”. That all sounds great. Does it work? My master’s degree is in public health, not clinical medicine, but still, I don’t know what that means, much less whether it’s effective.

Marketing copy aside, what I would look for would be clinical studies. To their credit, most luxury skincare firms do provide (or at least quote) clinical studies. However, just because something was studied in a clinical environment doesn’t make it useful.

Here’s an example from the La Prairie website, on their product page for their Skin Caviar Luxe Cream product:

Sol Wachtler once said that a district attorney could get a grand jury to “indict a ham sandwich”. I could get a panel to self-grade as having 63 percent more hydrated skin after looking at a glass of water.

In all seriousness, studies in which people self-report on their satisfaction with a product have little to no value unless there’s a test group (in this case, the La Prairie users) and a control group (say, CeraVe users), and none of the subjects know which products they’re using.

As for studies in which the results are “recorded by instrumental measurement”, I’d want to see a test group and a control group, I’d want it blinded for the subjects, and then I’d want it double-blinded so the people doing the measurement don’t know which products were being used by whom.

It’s possible that La Prairie products outperform cheaper products, but from the information they’ve given us, we don’t know that.

I don’t mean to pick on La Prairie here. I can’t find a single luxury skincare firm that provides publication-grade research evidence on the relative effectiveness of their products as compared to mass-market alternatives. Where studies do exist, they’re either methodologically unsound (as described above) or they refer to precursor work, not the actual products as sold.

Something I find incredibly interesting about the luxury skincare market is how it’s not typically based on the grand luxe boutique experience. Sisley Paris operates just 18 Maisons Sisley around the world. La Prairie offers “immersive experiences” at a total of seven hotel spas. Augustinus Bader has a total of two “Skin Labs”.

For context, Louis Vuitton operates over 450 stores in over 60 countries, and is rumored to have spent 1 billion euros just to acquire the building in which they’re building their new flagship on avenue des Champs-Élysées in Paris. Every one of those stores is a significant expense: rent (or capital), renovations and upkeep, salespeople, and more. What if they didn’t have that expense? How much more profitable would they be?

In other words, if you buy a luxury skincare product, you’re probably not walking into a serene environment, being shown to a comfortable seating area, having Champagne served to you—none of that. You’re probably buying in a department store, or perhaps a duty-free store. How much does your salesperson know about the product you’re buying? It’s impossible to say, but it could be as little as zero, depending on the setting.

When it comes to luxury skincare, it’s easier to say what you’re not paying for than it is to say what you are paying for. You’re not paying for research-grade studies that prove that it’s more effective than cheaper alternatives. You’re not paying for a grand luxe boutique experience. So what are you paying for?

Sensory engineering. How the packaging looks and feels. How the product looks when you use it. How it feels and smells on your skin.

Brand equity. Even though a luxury skincare company may operate few boutiques—or none—that doesn’t mean it doesn’t incur costs. Advertising, sponsorships, endorsements, distribution, counter staff, margins—all of these cost money.

Veblen pricing. This is the controversial part and where I’m sure any luxury skincare firm would push back, at least publicly. I asked above, “is the luxury skincare market a nearly pure example of Veblen goods in action?” In other words, are luxury skincare products priced more expensively because doing so actually increases demand? I believe they are. If vendors like Augustinus Bader, La Mer, La Prairie, 111SKIN, and others wanted to offer their products for less and still make reasonable profits, they could do so. But they don’t, because raising prices increases both perceived value and consumer demand.

I can think of two ways to frame the argument for using a luxury skincare product, so that gives you two ways of thinking about your purchase:

“This works better than cheaper products from competitors.” As I’ve explained, we don’t know whether this is true or not, because luxury skincare firms haven’t given us enough information to reach that conclusion. If this is why you’re paying hundreds of dollars or euros for a skincare product, that’s up to you—just know that it’s not supported by the evidence.

“I enjoy using this product, so I use it consistently, and my skin improves as a result.” That’s a completely reasonable position to take. Maybe it’s the texture, or the scent, or your belief in the brand—whatever the reason, if it gets you to use it, and your skin improves, that works. There’s a saying in medicine:

“The most effective medicine is the one the patient will take.”

So if you can afford luxury skincare products, you enjoy using them, and they help you take good care of your skin, that’s a great reason to feel good about your purchases.

Have you ever purchased a luxury skincare product? Did you feel it was more effective than cheaper products you’ve tried before or since?

When I wrote above that “I could get a panel to self-grade as having 63 percent more hydrated skin after looking at a glass of water”, that wasn’t entirely a joke. I’ll offer to any luxury skincare firm a $1,000 wager, with the proceeds going to the winner’s charity of choice (mine is Nest), that in a controlled research setting, I can convince a panel to self-grade their skin as much improved after 15 minutes without applying any product as the firm can after having a panel apply their own product.