As I wander around London, it is difficult to believe we are experiencing the sort of gloomy economic crisis the papers suggest. Stylish Ladies with a spring in their step, on-trend makeup and this season’s jewellery are everywhere. I barely notice that they are paired with last seasons pleated skirts and coloured jeans because they look fantastic. I marvel at their style-savvy.
Living joyfully and stylishly is possible even in a recession. Sure, prices have soared and money is tight. Nonetheless we are resourceful, we find a way, we adapt. The Lipstick Effect is proof.
For the uninitiated, the lipstick effect (or, as it is known in the less glamorous world of economics – the Leading Lipstick Indicator) is the theory that, when facing an economic crisis, consumers will be more willing to buy less costly luxury goods.
So instead of buying the latest red-soled Louboutins, they will invest in a red lipstick that makes them feel just as sexy. Consumers still have the desire to treat themselves, the only difference being they opt for smaller ticket items.As we flounder in and out of a double-dip recession, consumers are more likely than ever to follow this trend.
The first traces of the lipstick effect can be traced back to the Great Depression in 1930s America when industrial production halved but cosmetic sales rose. More recently, after the 9/11 attacks, lipstick sales in the US were said to have doubled. When consumer confidence is low, we opt to spend our disposable income on items that have less impact on our available funds. The implication is that consumers will buy affordable luxuries even if there is a crisis.
The lipstick effect also applies to jewellery as the recent hyper-growth of Stella & Dot testifies. Women want to look great and so instead of buying an entire outfit, they buy stylish statement pieces that they can accessorise alongside a variety of outfits they already own.
Supermarket trolleys may be filled with own-brand items but our make-up bags and jewellery boxes are brimming with recent purchases that make us smile. Women are resourceful and will always find a way to look good because it makes us feel great. We roll up our stylish sleeves and find solutions. Right now, that means reinventing how we shop and we are up for the challenge.