You can’t get it, but you may already unknowingly be part of
it.
The
Lipstick Effect
You’ve
probably heard it mentioned but wondered exactly what it is. It’s being used
more frequently at the moment, especially when the household spending is discussed.
It’s a
subtle, but unofficial economic indicator. While the term was only coined in
the past few decades, it can be traced back to the depression in the 1930’s.
The Lipstick effect is the purchase of a luxury beauty item that gives a feel
good effect to a woman. It refers only to cosmetics, not clothing or any other
discretionary item. The psychology behind this is the in tight economic times
women want a product that quickly and easily makes them attractive to a
potential mate with good earning capacity. Whilst in this day and age that may
seem very antiquated and most modern women would strongly argue this, we are
still seeing it in action.
It was
reported that Estee Lauder saw significant increases in lipstick sales after
the 9/11 stock market crash and also the 2008 crash. The one significant
variant to the Lipstick Effect was during Covid and the economic roller coaster
of those couple of years. Women swayed from purchasing lipstick that would be
concealed by a mask and instead perfume purchases increased.
The Lipstick
Effect relies on regular sales figures from major cosmetics brands- which are
not always forthcoming. It’s also a bit ambiguous because some women may be
sticking to their regular cosmetics brands, whist others are still purchasing
lipstick but have downgraded to cheaper brands.
