The Lipstick Effect in Economic Crises

The Lipstick Effect

In a time of economic crisis, your happiness is just one Chanel lipstick away. So goes the underlying assumption behind the Lipstick Effect. The phrase has been used to explain the phenomenon of a massive rise in lipstick sales in times of economic crises. The theory is that as budgets reduce, people tend to choose less expensive luxury goods. Where once in a time of economic plenty you would have splurged on a Louis Vuitton, now your feel good item of choice is your Chanel Lipstick. The underlying assumption to the theory is that human beings still wish to purchase luxury items even in times of economic crises. The other assumption here, or rather inferential conclusion is that all the buying is being done by women (or gay men, or transsexuals, or members of the queer community…let’s face it; straight men rarely buy lipstick for themselves). More power to women in this case, or is the lipstick effect a simple consequence of the fact that most boy’s toys tend be rather expensive electronic gadgets? After all you would need a state of the art LED or at the very least a remote controlled model truck to make a man giggle with glee, both of which are more expensive than a Chanel or even Yves St Laurent lipstick. So do men get the raw end of the deal just because lipsticks are amongst the cheapest luxury items on the market?

Think about it, the spectrum for women’s luxury items ranges from diamonds, jewelry, clothes (the designer kind), coats, hand bags, electronics, makeup and perfumes. For men it would be electronics, electronics and more electronics, clothes ( but these are often tastes born out of necessity rather than choice, and even then its not like his very sexy classic suit goes out of fashion every year), perfumes, did I mention electronics ? So in times of crises why is it that women head for the lipstick counter? Apart from making your lips look incredibly alluring, women often buy lipsticks because they are “small indulgences”, a replacement item for a more expensive purchase, and they are morale boosters, nothing makes a woman feel more beautiful and sexy than her stare-worthy pout (lets take our eye liners and mascara for granted ladies). Lipsticks can be an instant pick me up. A new shade to spice up last season’s outfit, a different color to shake up your personal style just a little bit with shades ranging from nudes, pinks, hot reds to blues, greens and blacks lipsticks allow you to have fun with color without the need to change your wardrobe every few months. Furthermore, let’s be honest, unlike ice-cream, lipsticks will not make you fat, so once on the lips, will not reach your hips. As an economic indicator, the lipstick effect has been debated to no end. While sales figures for lipsticks do often send signals over the state of the economy, the lipstick effect would not figure in the top 20 economic indicators. After all fashions, trends, and cultural buying patterns would play a huge role in the sales of lipsticks. Economic data for 2008 for the U.S (think GFC) has shown that lipstick sales dropped but contrarily lip gloss sales soared. This to me seems like a simple consequence of a change in fashion trends. Needless to say, while the world reeled from the GFC, the make-up companies reeled in the moolah.

As the year 2008 drew to a close, most cosmetic companies were highly anticipating lip-sticks to make a come back. Nearly at the end of 2010 I think we can see their predictions have come true. While no one’s planning on ditching their gloss, bold colors have made their mark and lipsticks are back with a bang. The stars have provided the perfect alignment of a now fading financial crises and a fashion trend that screams of vibrant shades to create an atmosphere when your lipstick truly is your best friend. Because at the end of this train of thought it has occurred to me that while make-up may not actually make a woman more beautiful, it definitely makes a woman feel beautiful. If small pleasures came with a price tag, think no further than your favorite lipstick. It isn’t rocket science, just basic economics. // ]]>