The “lipstick index” is back, and this time it’s gone upmarket, per Bloomberg. The term started by Leonard Lauder, the former chairman of Estee Lauder during the Great Recession of the early 2000’s, who noticed that lipstick sales had risen, while ready-to-wear sales were dropping off for other brands. For Lauder, this was significant, as it seemed to signify that women – when faced with an unstable economic environment – turn to more affordable “indulgences,” such as beauty products in lieu of more expensive garments or accessories.
Lauder’s theory is back in play now, some 15 years later or so. According to Bloomberg, “Consumers may be thinking twice about buying a Louis Vuitton handbag, but they are happy to snap up Christian Dior cosmetics.” Yes, while “growth in the market for luxury goods such as watches, clothes and accessories is slowing, the premium beauty and personal care market – which includes upscale makeup, skincare, haircare and fragrance – is gaining ground.”
But this is not merely limited to lipstick, as the terminology’s title might suggest. The same is holding true for fragrances, particularly premium perfumes, which have in recent quarters experienced greater growth than many mass brands. And as a result, an increasing number of luxury brands are looking to cosmetics – and now.
Gucci, shoe designer Christian Louboutin and Burberry, for instance, all recently entered into the market. Their hope, per Bloomberg, “is that their beauty products will build awareness and encourage loyalty that will eventually transfer to costlier products such as handbags.” Louis Vuitton, on the other hand, has decided to re-enter the fragrance game after a 70 year absence, likely in an attempt to off set any drops in handbag sales.
Leonard Lauder was right: when times get tough, reach for lipstick.