Lipstick Effect

Oct 23, 2013

Relationship between economic recession and lipstick effect

Generally, the idea is that, during a recession, customers tend to reduce the consumption of the big ticket items. They probably cut the spending on buying cars, house or the luxurious jewelry (Elliott, 2008). Thus a majority of related- industries always get stuck when the recession is coming. However, it seems that women would like to spend more money on beauty products especially the lipstick in an economic decline (Pittsburgh Post, 2001). It has been noted by some observers who call it “lipstick effect”

“A theory that states that during periods of recession or economic downturn, consumers will eschew purchases of big-ticket luxury items and seek material solace in smaller indulgences, such as premium lipstick. ” (Investopedia, 2012) The "lipstick effect" is originated from the Great Depression of the 1930s. “In the four years from 1929 to 1933, the production of industry in the US halved, but sales of cosmetics increased ”(Elliott, 2008, Dec 22). This was so in the recessions of 1990 and 2001. Janet Bartucci, a vice-president of the New York-based cosmetics company, says surging sales of lipsticks can become a sigh which indicate the recession, because they reveal that women began substitute cheap and goods item for more expensive items (The Times, 2001). Leonard Lauder, Chairman of Lauder, who once found that the sales of lipstick sales went up during tough economic times, also claimed that ‘lipstick effect’ indicate the bad economics (Hill, Rodeheffer, Griskevicius& Durante& White, 2012). How and why the recession of economics affect the woman’s behavior? It can be explained after analyzing the change of women’s consumption pattern and the purpose and psychology of purchasing lipsticks.

Reference

Gallagher, R. Industry Analysis: Electrical Equipment.VALUE LINE. Retrieved from...