What is ‘Leading Lipstick Indicator’
An indicator based on the theory that a consumer turns to less expensive indulgences, such as lipstick, when she (or he) feels less than confident about the future. Therefore, lipstick sales tend to increase during times of economic uncertainty or a recession.
Also known as the “lipstick effect.”
Explaining ‘Leading Lipstick Indicator’
This term was coined by Leonard Lauder (chairman of Estee Lauder), who consistently found that during tough economic times, his lipstick sales went up. Believe it or not, the indicator has been quite a reliable signal of consumer attitudes over the years. For example, in the months following the September 11 terrorist attacks, lipstick sales doubled.
Further Reading
- Governing lipitor and lipstick: capacity, sequencing, and power in international pharmaceutical and cosmetics regulation – www.tandfonline.com [PDF]
- Theory and empirical research on cultural consumption in China: lipstick effect – dl6.globalstf.org [PDF]
- Social and psychological determinants of consumption: Evidence for the lipstick effect during the Great Recession – www.sciencedirect.com [PDF]
- The existential cost of economic insecurity: Threatened financial security undercuts meaning – www.tandfonline.com [PDF]
- Prioritization of sustainability indicators for promoting the circular economy: The case of developing countries – www.sciencedirect.com [PDF]
- A “dirty” approach to efficient revenue forecasting – jpna.org [PDF]
- Testosterone and domain-specific risk: Digit ratios (2D: 4D and rel2) as predictors of recreational, financial, and social risk-taking behaviors – www.sciencedirect.com [PDF]
