What could lipstick possibly have to do with economic indicators? A lot, according to The Lipstick Effect. Huh? Does that refer to to matte vs. cream, or maybe, lip sheer over lip stain? Not quite.
Kisses for the Economy
The Lipstick Effect aka the Leading Lipstick Indicator says that consumers will indulge in less-expensive feel-good items in uncertain economic times. Historically, lipstick sales increase during economic or political turbulence. For example, lipstick sales doubled in the wake of the 9/11 attacks.
Personally, I’ve always been able to justify a new lipstick or lip gloss during my own (frequent) times of economic uncertainty.
Makeup mogul Leonard Lauder, former CEO and current board chairman of Estee Lauder, originally coined the “Leading Lipstick Indicator” because sales of his lipstick consistently increased during tough economic times.
I may be slow when it comes to economics, but there’s no denying the fact that we’re experiencing major economic unrest. The Fed keeps slashing interest rates and pumping money into the economy, which will lead to inflation. Unemployment is up and people are spending less. Consumers are spending less and unemployment is up. Plus, credit is tight and house prices are falling.
What’s Your Plan?
Given the gloomy economic outlook, how will you tighten your financial belt? Do you plan on going spring clothes shopping? I plan on sticking with the essentials — and a maybe a new lipstick, or five.
Photo via Sonny Vandevelde