04 May Why the beauty industry is about to explode
While just about every industry is trying its best to keep their head above water, I have a theory that the beauty industry is going to be one of the few industries to see growth during the global pandemic and here is why…
While none of us have lived through a global pandemic and there’s a lot unaccounted for, history tells us that when the economy goes into a recession or depression, the sale of lipsticks increases, which is known as The Lipstick Effect.
The lipstick effect is the theory that when facing an economic crisis consumers will be more willing to buy less costly luxury goods. Instead of buying expensive fur coats, for example, people will buy expensive lipstick. – Wikipedia
The Lipstick Effect was first noted during the great depression when industrial production was more than halved, meanwhile, the sale of cosmetics continued to rise between the years 1929-1933. At the same time, the unemployment rate rose to more than 6 million in Germany, but cosmetic companies like Beiersdorf didn’t lay off a single staff member! The Lipstick Effect was also highlighted during the 9/11 Terrorist Attacks, with several cosmetic companies noting an increase in sales the day after the attacks took place. In addition, countries like Japan have seen similar buying habits, which leads me to think that South Africa’s economic crisis resulting from the global pandemic will likely see a similar pattern.
So, why do cosmetic sales increase in times of crisis?
If you’re part of just about any beauty community on Facebook, the members are quick to tell you that makeup isn’t about looking the part and despite most of us working from home in sweats and yoga pants, makeup is still crucial for many. Makeup is a creative escape, a way to make ourselves feel better, an essential mental break, a self-care practice and a quick way to lift the mood. For many, it’s the confidence boost we all need like, making us feel in control, fierce and ready to conquer the world.
Besides the mental relief that makeup brings, it is also a more affordable way to spoil ourselves. For many, an economic crisis means giving up all the luxuries in life, but truth be told, rather than lose the spending habit we tend to trade down to cheaper items to help cheer ourselves up.
South Africa’s unique approach to the lockdown will also have a dramatic effect on the sales of cosmetics which The Lipstick Effect may not have seen previously. With us not being able to buy makeup for the last 5-weeks, it is likely that even if you’re the type that only has one foundation, one blush, and one lipstick, your makeup is running low. A lot of people are irritable and are looking for a quick pick me up which often means “retail therapy” and with so many “vices” not marked as an essential, more and more people are turning to the beauty aisle at Clicks and Dis-Chem during their “essentials stock up.”
I am really interested to see whether the fact that there are no testers available will influence the sales of cosmetics during the global pandemic. My guess is that it won’t, and it might actually run the sales up even further as people are more likely to purchase multiple shades either because they bought the wrong shade and came back for a new one, or perhaps stock up on a few favourites in fear of stage 5 of the lockdown returning.
I also think that South Africans will likely opt for more affordable beauty products from drugstore brands like Essence, CATRICE, Maybelline and Revlon, unlike our American counterparts who saw an increase in sales for luxury beauty brands like Chanel.
Influencer marketing will likely change too. With fewer brands sending out press samples due to cuts in marketing budgets, we may start seeing less beauty content and more “life” content from leading influencers. Understanding that consumers won’t be spending thousands on luxuries like expensive skincare each month, might see bloggers and influencers make a calculated move to making their content more “essential and budget-friendly.”
While the future for many remains unclear, I have a feeling that the beauty industry is going nowhere. However, marketing companies will need to adapt their strategies to target the “penny conscious” consumer who is looking for a smart way to spoil themselves and feel good.