There’s no doubt the economic outlook isn’t as rosy as it was a few years back. Every industry (and household) is being affected in one way or another from rising material and shipping costs, supply chain issues, rising labor costs, and other factors that are making everything both businesses and consumers purchase more expensive.

But how do these forces affect the beauty industry, which has been historically considered to be recession-proof?

What Is The “Lipstick Effect”?

Before we dive into the current economic forecast for the beauty industry as a whole, it is important to understand how it became known as a recession-proof industry. The term “lipstick effect” (sometimes also called the “lipstick index” was first put forth in 1998 by economics and sociology Professor Juliet Schor in her book The Overspent American. In her research she found that when money is tight, women would splurge on luxury lipsticks that are applied in public (like restaurants and restrooms) and would forgo higher-priced beauty items applied at home, like eye makeup and cleaners.

In 2001, Leonard Lauder added to the “lipstick index” theory when he shared anecdotal evidence of rising lipstick sales right after the 9/11 terrorist attacks. In the 2008 recession, he doubled down on the sentiment reporting a rise in lipstick sales. This same phenomenon was noted during the Great Depression when makeup sales increased between 1929-1933. The term refers to the trend that when discretionary spending is down and purchasing big ticket items is not a priority that buying lipstick offers a way of escapism.

The “lipstick effect” was given further credence from a study entitled “Boosting beauty in an economic decline: mating, spending and the lipstick effect,” conducted by Texas Christian University professors Sarah Hill and Christopher Rodenheffer. In the study the pair looked at the effect of all beauty products rather than simply just lipsticks. The researchers theorized that women purchase beauty products to enhance their attractiveness to men since men place a premium on a woman’s physical appearance in their choice of a romantic partner.

“Recession cues increased women’s desire for products that could make them more attractive to mates, despite the significantly greater expense of such products,” they wrote and suggested that was because luxury beauty brands do a better job advertising their attractiveness-enhancing benefits. The researchers concluded that economists have established that recessions are reliably associated with increased spending on two types of products: traditional inferior goods (e.g., spending more on tuna rather than salmon because of budgetary constraints) and morale boosters.

Move Over “Lipstick Effect”, There’s A Broader Phenomenon Occurring Known As The “Beauty Index”

Larissa Jensen, VP, Beauty Industry Advisor, NPD, said that not only does the Lipstick Index apply to today’s declining consumer sentiment and total retail decline, but it represents something broader. “This is not just lipstick. It’s actually beauty. Tied to this is the shift in the definition of wellness,” said Jensen in a presentation kicking off the Cosmoprof North America’s 19th annual beauty trade show, “We are not yet feeling that inflationary pressure that other industries are feeling, but the pressures are there.” Jensen continues, “Consumers are traveling more. They’re going to more events. All of this is really leading to that strong growth within beauty. That’s leading to the rise in what we’re calling the Beauty Index.”

While non-invasive beauty treatments aren’t included in the current “beauty index”, with the consumer shift in wellness and putting a priority on looking and feeling good in their own skin, one would assume that these types of services will remain in demand, even in tough economic times.

However, in 2008 the American Academy of Facial Plastic and Reconstructive Surgery (AAFPRS) conducted their annual survey and found that more than 80 percent of the board-certified facial plastic surgeons reported an increase in non-invasive cosmetic procedures amongst consumers who wanted to delay the effects of aging with dermal fillers, neurotoxins, and skin resurfacing treatments (like chemical peels, microdermabrasion, and lasers). If the past dictates the future, it is safe to say that this trend will continue during the current economic crisis we have happening.


While total retail sales and consumer sentiment are steadily declining, the overall sentiment from the experts and brands is that beauty, as a category, is recession-proof. Even during lean times like we are experiencing now, consumers will lean towards products and services that are wellness-oriented, and not just lipstick.

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