Tuesday, October 17, 2023

The Lipstick Effect


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.

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