The trend of increased cosmetics sales during times of economic turmoil has been dubbed “the lipstick index”; a term coined by Leonard Lauder, the chairman of the board of Estee Lauder {although it applied to cosmetics in general, not only Estee Lauder}. He suggested that since people were unable to purchase more expensive items like dresses and other accessories, that they instead transitioned towards budget-friendly alternatives like lipstick and nail polish.

So during dire economic times, lipstick sales spike, a shorthand to gauge consumer spending. When more extravagant luxuries seem out of reach, the index suggests, lipstick is an affordable treat. That economic indicator hasn’t held up during the current pandemic-induced recession. Makeup sales have tanked up to 30% globally this year, according to a May report from McKinsey & Company. And lipstick in particular has suffered; according to the same report, Amazon sales of lip care and color dropped 15% from the year prior in the four weeks ending in April 11, the biggest drop of any category.

Lipstick sales are on track to fall far short of their 2019 numbers; between January and June, lip color brought in just $135.7 million for prestige beauty brands, compared to $541.5 million during all of 2019.

Fortunately, cosmetics companies have been developing and introducing new products for the past decade or so, and at an affordable price point. One of the most significant shifts is the movement towards green/eco-friendly cosmetics, which are healthier for both the human body as well as the planet’s biosphere. Additionally, cosmetic products can be found in a massive variety of retail outlets that are accessible to the masses, not to mention the internet’s e-commerce.

But for the rest, the cosmetics industry is undoubtedly a force to be reckoned with; steadily rising from a revenue of $41.56 billion in 2004, to projections as high as $60.58 billion in 2015. Even during the devastating economic recession of 2008, the cosmetics industry continued to thrive- in fact, the industry in general experienced a profit increase; despite the poor state of affairs of the national economy. This was also the case in The Great Depression. Historical patterns have shed light on an interesting anomaly. Even during times of financial hardship, the cosmetic industry’s customer base saw their products as a necessity. The cosmetics industry is doing something extraordinarily well, and perhaps others could take note in order to achieve similar levels of success.

Adopting an eco-friendly approach to a product, especially one that was around long before the environmental concerns became evident, is no small task. All of the business practices, techniques, and materials had to be questioned in light of the new information. However, many of those in the cosmetics industry remained undaunted and pledged to be environmentally responsible while still growing and expanding

Enduring through economic difficulties is an extremely difficult task. Many companies met their end when they were unable to find success and make a profit during the recession. Consequently, it is important now more than ever to discover the companies and the industries that are achieving unprecedented levels of success. Cosmetics is such an industry- and it is interesting to learn how and why they survived. It is obvious that they operated efficiently; and most of all, they offered a product that transcended financial barriers and limitations.

Sources:

http://www.economist.com/node/12995765

http://www.huffingtonpost.com/2012/07/05/beauty-product-spending_n_1652479.html

http://www.learnvest.com/2011/10/your-guide-to-green-and-safe-makeup/

http://www.accuval.net/insights/industryinsights/detail.php?ID=120

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