Calculate your rising sign

Browse all

Buying more lipsticks is sign of economic crisis?

What's the Lipstick Index and why consumer research for small luxuries is good for the beauty industry

Buying more lipsticks is sign of economic crisis? What's the Lipstick Index and why consumer research for small luxuries is good for the beauty industry

Inflation rises, our disposable income shrinks to the bone and, to use a current example, our salary is barely enough to cover the cost of the electricity bill? Lipstick sales skyrocket. In times of crisis and uncertainty, people are forced to give up more expensive goods, such as shoes or handbags, but they indulge in a little beauty pampering, and lipstick, preferably red, becomes the little "affordable luxury" that can positively affect the mood by helping us cope with even the most complicated days. This is a phenomenon known as the Lipstick Index, a term coined by Leonard Lauder, president of Estée Lauder, during the 2001 recession, after noticing that women were buying more cosmetics than ever before, with a significant increase in lipstick sales (up 11 percent), despite economic uncertainty. 

Throughout history the trend has been recurring. Between 1929 and 1933, during the period of the Great Depression, lipsticks experienced a boom in sales for the first time. The same had happened during the years of World War II, when Winston Churchill ordered all cosmetics except lipstick to be rationed because the color red on the lips helped raise the morale of women and men. As in the 1950s when red lipstick became a symbol of rebirth and restart. In 2001, after the attack on the Twin Towers and during the great recession, the phenomenon was repeated, so much so that it was noticed by the Estée Lauder team. Lips were also back in the spotlight in 2008 following the colossal Lehman Brothers bankruptcy that marked the beginning of a global economic crisis. The Lipstick Index only fluctuated during the pandemic, threatening to change its name to the Nails or Skin Index. As is easy to imagine, lipstick sales slowed sharply. Smartworkers often did not wear makeup, while those who went out had masks covering their faces and no longer felt the need to paint their lips. When it comes to make-up, attention and, consequently purchases, have largely shifted to nail polish, perfume and skincare products.

More lipsticks are bought during economic crises, and now that war, the energy crisis, high utility bills and an 'unstable economy fill the headlines and everyday life, the Lipstick Index bell is ringing again. According to the NPD Group, lipstick sales increased 44 percent in the first quarter of 2022, showing how once again as the world goes through yet another phase of uncertainty a small beauty product represents for many a kind of exorcism, an infusion of hope in a tube. For beauty brands, on the other hand, it means having to prepare for a general decline in luxury department revenues by changing their strategies and directing their forces into the production of cheaper items that people do not give up even in the darkest of times. But be careful, as BoF points out, "Whenever there is a lot of volatility, there is a flight to quality." So more quality in basic products, could also lead to a price increase in entry level products, as the expectations placed on lip tint are as high as those placed on buying a designer bag. The phenomenon of the Lipstick Index makes one reflect on how the perception of the idea of luxury is extremely fickle to historical and social overtones, as already evidenced by the turnover of creatives at the head of companies and the extemporaneous changes of course in the beauty market.