HOW COULD LIPSTICK SALES REVEAL AN ECONOMIC CRISIS?

 

Hi, everyone! Have you heard about the lipstick effect? Can you believe that the economic crisis of a country could be revealed by the increase of lipstick’s sales?

WHAT IS THE LIPSTICK EFFECT?

In a New York Times article published in 2008, Leonard Alan Lauder (a businessman and the head of Estée Lauder) said that he noted his company's sales of lipstick rose, after the terrorist attacks of  2001, they doubled. So he created the definition of lipstick index. It is an index to determine the increase of the lipsticks’ sale. In the 2001 crisis, the index shared that there was an increment of the make up’s sale (+11%) and especially red lipsticks’ sale. That increase not only happened after the Twin Tower’s attack but also during the most important economic crisis of  contemporary history. American studies shares that between the 1929 and 1933, a very bad time for American industry and economy, the make up’s sale increased of the 25%.

In a period of crisis we give up a lot of things butwe need hope. To feel beautiful, to have more self-confidence and to have something expensive but accessible, women buy lipstick… so we have the lipstick effect. The Tagesspiegel tells: “Who couldn’t buy a car or a house, allow himself a little luxury in his day life: men buy more than one fragrance and women buy more often lipsticks.”  So in these times of crisis, the women starts to go in beauty shop and buy fragrances, lipsticks and other beauty products.

 

During the lockdown there was the opposite effect, the lipstick’s sale decreased of 36% in  2020 and products for skin and hair care routine increased. The reason of the reduction was the use of face masks. At the end of 2021, based on the studies of Cosmetica Italia, the use of lipstick had an increase of the   11%. In the first six months of the 2022 it increased of 8%. There were other crisis in Italy even before. In 2009 the national pil decreased of 8% and the lipsticks increased of 1%.  2012 was a positive year for world, but a bad year for Italy because of the crisis of the Italian sovereign debt, but that's when  lipstick sales increased of 3, 5%.

In Germany last year the make up sales increased of 16% and lipstick sales were about 8 million. It also happen in 2009,  when the German economy collapsed of 8%. Probably, the increase of 2022 happened for the lockdown and, maybe, it wasn’t a signal of crisis, but economists were worried.

This effect could be seen as a symptom of crisis, but probably it is not. The Economist tested the lipstick effect in 2009 with statistical analysis, stating that "reliable historical figures on lipstick sales are hard to find, and most lipstick believers can only point to isolated, anecdotal examples as evidence of the larger phenomenon. Data collected by Kline & Company, a market-research group, show that lipstick sales sometimes increase during times of economic distress, but have also been known to grow during periods of prosperity. In other words, there is no clear correlation."

GIORGIA M., 4sc