In the beauty industry, the Lipstick Effect, also called the Lipstick Index, is considered the main economic indicator for the category. The concept is that in times of recession and other economic constraints, women indulge in discretionary purchases that provide emotional uplift without breaking the budget. Lipstick does the trick.
While the lipstick effect may not have much influence in mainstream business circles, new data from global market tracking firm NPD Group reveals that sales of lipstick and other lip makeup products grew more than twice as fast as other products in the category during the first quarter compared to a year earlier. .
And lipstick sales continue to grow week by week, with premium brands taking a bigger share of sales than mainstream brands. Women are also embracing brighter, more dramatic colors this year, rather than natural, muted looks.
“Lipstick is transformational,” Larissa Jensen, NPD vice president and beauty industry adviser, told me. “It’s quick and easy, unlike eye makeup which takes time to apply. Lipstick is super powerful because it can instantly transform your face like nothing else. A simple swipe on the lips makes your face pop.
Origins of the lipstick effect
The lipstick effect was first posited by economics and sociology professor Juliet Shor in her 1998 book The American overspent. She discovered that when money is tight, women splurge on luxury brand lipsticks that are used in public, such as semi-public restrooms and after dinner at a restaurant and forgo beauty products. more expensive ones that are applied in the privacy of the home, such as face and eye cleansers. to put on makeup.
“They seek affordable luxury, the thrill of buying in an expensive department store, indulging in a fantasy of beauty and sensuality, buying ‘hope in a bottle.’ Cosmetics are an escape from an otherwise dull everyday existence,” she wrote.
In 2001, Leonard Lauder, president of Estee Lauder, provided anecdotal evidence of the lipstick effect when he reported that his company had seen an increase in lipstick sales after the 9/11 terrorist attacks. He dubbed the post after the 2008 recession, once again signaling an increase in the company’s lipstick sales.
Discover the psychology of the lipstick effect
An academic study conducted by Sarah Hill and Christopher Rodenheffer, professors at Texas Christian University, bolstered the credibility of the lipstick effect theory.
In the study titled “Boosting beauty in an economic decline: Coupling, spending, and the lipstick effect,” the researchers adopted the broadest definition of the lipstick effect to include all beauty products, instead of focus exclusively on lipstick.
Beauty products have been defined as cosmetic products that enhance a woman’s physical appearance, including lipstick. And through a series of four experiments, the results were consistent.
“Signals of the recession have steadily increased women’s desire to buy beauty products,” they wrote, just as it tends to divert their spending away from other products that have no beauty-enhancing qualities, such as furniture, electronics and hobby/hobby products.
Researchers have hypothesized that women purchase beauty products to enhance their attractiveness to men since men place great importance on a woman’s physical appearance when choosing a romantic partner.
It’s no surprise that women buy beauty products to increase their attractiveness to men, but women lean more into them during tough economic times.
“Because there are fewer men with access to resources during a recession [e.g., higher unemployment]women’s desire to access a partner’s resources increased in response to signals of recession,” they explained.
More beauty from luxury brands
They then tested the hypothesis that, under economic stress, women indulge in small indulgences for an emotional boost, such as lipstick, rather than more expensive luxuries, such as handbags. This is the justification Leonard Lauder offered for the lipstick effect he observed.
The researchers tested this hypothesis and found that it did not hold. When given a choice between expensive “attractiveness-enhancing” products and discounted versions of them, women, regardless of economic status, chose the more expensive options. Specifically, “recession signals have not increased the desire for discount brand name beauty products.”
Women choose the most expensive brands because they alone are perceived as being more effective in enhancing their attractiveness.
“Signals of the recession have increased women’s desire for products that might make them more attractive to their partners, despite the significantly higher cost of these products,” they wrote and suggested this was because Luxury beauty brands advertised their attractiveness-enhancing benefits better.
And the researchers concluded:
“Economists have established that recessions are reliably associated with increased spending on two types of products: lower-quality traditional products (e.g., spending more on tuna than salmon due to budget constraints) and morale boosters (for example, going to see a Charlie Chaplin film in The Great Depression).
“Although the lipstick effect has sparked some anecdotal lore, the present research suggests that women’s spending on beauty products may be the third predictor of economic downturns – one that may be rooted in psychology.”
Power in the lipstick tube
The NPD data adds an interesting postscript to this conclusion. During the pandemic, with everyone hiding behind their face masks, makeup sales plummeted but fragrances saw unprecedented growth.
“Without being able to put on lipstick, consumers were flocking to fragrances,” said Jensen of NPD. “And the greatest proportion of fragrance sales during this period were seen in the most expensive luxury and designer brands.”
Because a bottle of perfume costs much more than a tube of lipstick, and behind face masks, women’s lips were not visible, they turned to perfume to attract men’s attention. . But now that things are back to normal, women are once again indulging in the power of lipstick.
April Benson, a clinical psychologist in New York City, believes that of all beauty products, lipstick is the most profound in immediately and drastically changing a woman’s appearance. It’s “very primitive… It’s part of the uniform of desirability and attractiveness”.
And beauty entrepreneur Poppy King, who has studied lipstick her whole life in her role as Lipstick Queen, said: “Give a woman the right lipstick and she can conquer the world.”