The Lipstick Indicator

What is the Lipstick Indicator?

The Lipstick Indicator (also the Leading Lipstick Indicator or the Lipstick Index), was coined by Leonard Lauder (chairman of Estee Lauder) when he noticed that during tough economic times, his company’s lipstick sales increased. Lauder first noted this connection in the weeks and months following September 11, 2001. In fact, lipstick sales reportedly doubled during the economic unsteadiness that followed 9/11. And during the decade of the great depression, cosmetics sales increased 25%.

It may not be the most reliable or sound measure of the economy, but there continues to be a trend of lipstick sales increasing in times of economic downtown.

What is going on with lipstick sales right now?

According to the New York Times, lipstick sales are up 40% in the last few months. And, unless you’ve been living under a rock, you know that the economy has been tanking as of late.

What is responsible for the connection between lipstick sales and a bad economy?

The most commonly cited reason for this phenomenon is that women use inexpensive indulgences, like lipstick, to substitute for more costly luxuries. Instead of spending $150 on a blouse, a woman would opt for a $15 tube of lipstick.

Another frequently cited reason for the Lipstick Indicator has to do with image. A woman can look poised, vibrant, and put-together even when the economy and her bank account aren’t in great shape simply by applying lipstick. It enables her to paint a picture that everything looks well and good even though reality consists of war and recession.

What else could account for the Lipstick Indicator?

Other factors may be at play or simultaneously contribute to the Lipstick Indicator. For example, I wonder, if for some points in history, increases in lipstick sales have to do with distinguishing gender roles. Women may seek to show off their feminininity by using lipstick more often.

Or, perhaps the first signs of lipstick sales increasing in times of war or economic downturn had to do with women transitioning into the workforce and spending more time out of the home. Since then, other factors may have played a role in the continued connection.

The media may be having its own effect, or enhancing an existing effect, on lipstick sales during recessions. If media coverage regarding the Lipstick Indicator increases when the economy is in a downturn, such coverage could be encouraging women to go out and buy lipstick, in turn, reinforcing the theory. The media may be influencing consumer behaviour when it comes to lipstick sales and consequently enhance or exaggerate the Lipstick Indicator’s effectiveness and accuracy.