The Lipstick Effect: what is it all about?
First brought into spotlight by Leonard Lauder, the chairman emeritus of The Estée Lauder Companies Inc., the Lipstick Effect states that during economic hardships and crises, consumers tend to buy more lipstick instead of expensive items such as jewelries, apparel or the like. Proponents of this theory refer to the fact that after the 9/11, statistics showed an 11% rise in demand for lipsticks. Later, in 2008, Lauder said that he had noted a rise in his company’s sales of lipstick. Similarly, during the Great Depression, cosmetic sales rose while the economy was experiencing some of its darkest days.
Put simply, the theory discusses that the demand for lavish items during hard times and recessions decrease and consumers treat themselves to cheaper luxury items, such as lipsticks.
In 2009, however, the Economist magazine used statistical analysis to run a test on the subject. According to the Economist, “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.”
On the other hand, in a study published in the Journal of Personality and Social Psychology, women’s consumer behavior amid economic recessions was studied. As specified in the paper’s abstract, “…Findings revealed that recessionary cues—whether naturally occurring or experimentally primed—decreased desire for most products (e.g., electronics, household items). However, these cues consistently increased women’s desire for products that increase attractiveness to mates—the first experimental demonstration of the lipstick effect. Additional studies show that this effect is driven by women’s desire to attract mates with resources and depends on the perceived mate attraction function served by these products. In addition to showing how and why economic recessions influence women’s desire for beauty products, this research provides novel insights into women’s mating psychology, consumer behavior, and the relationship between the two.”