Life StyleThế giới quanh ta

The classic marketing tactic of the cosmetic industry in the time of inflation

In the current inflationary economic era when prices in many countries like the US hit a 40-year high, it is inevitable that consumers will tighten their wallets. However, the data of some items such as perfumes, lipsticks, cosmetics… still went up.

So what’s going on?

Boyfriend doesn’t have it, but lipstick must be bought

“Lipstick effect” or “Lipstick Effect” is a situation in which consumers do not have enough money to buy great value products such as luxury cars, villas, foreign travel… when the economy is in recession and will spend money to buy high-end products with more moderate value such as lipstick, cosmetics.

Lipstick effect: A classic marketing tactic of the cosmetic industry during inflation - Photo 1.

Besides, the low-income class will want to reward themselves with something to help them forget their financial problems.

For this reason, companies that make high-end cosmetics can benefit from an economic slowdown.

The concept of the “Lipstick Effect” was discovered by Estée Lauder President Leonard Lauder after he noticed his company was selling more lipsticks than usual after the September 11, 2001 terrorist attacks. Specifically, its lipstick sales increased about 11% in the second half of the year compared to the first half of the year.

From there, Chairman Lauder argues that lipstick sales can be used as an economic indicator, whereby lipstick sales increase when macroeconomic conditions deteriorate, and vice versa.

Lipstick sales are also said to have picked up during other difficult times, such as the 2008 financial crisis. The Korea Herald reported that lipstick sales increased by 20-30% in the second half of 2008 in Korea. Country.

While the theory is controversial, some experts say the pattern was also accurate during the Great Depression some 90 years ago when moderately priced luxury goods increased in sales.

Bath & Body Works, which specializes in scented soaps, room sprays, and scented candles, said its sales in the first quarter of 2022 were even higher than in the same period last year. The main reason is that although not an essential item, their products are an “acceptable luxury” in the current inflationary era.

However, according to CNN, the “lipstick effect” does not appear to be working for the restaurant industry or movie theaters, which should have done well at the beginning of the recession.

In theory, not having enough money for luxury travel causes people to spend more money on dining out or watching movies to compensate. But because of the quarantine for up to 2 years because of the pandemic, many American households have used the abundant subsidies from the government to travel. Meanwhile, high inflation causes them to cut expenses such as eating at restaurants or watching movies to save money.

Lipstick businessman

Besides, the “lipstick effect” also appears when the economy implements prolonged economic contractions or austerity measures.

For example, at the time Britons voted to leave the European Union (EU), aka Brexit, some economists were already seeing the lipstick effect in places like Liverpool. Sales of lipstick and many other items such as wine and coffee increased sharply despite the economy at that time was full of instability due to fear of a crisis.

The birth of “Lipstick Effect” has also made a part of businesswomen stand up to sell makeup or cosmetics, achieve success and be called “Lipstick Entrepreneur”.

However, during the pandemic period when people often wear masks and are isolated at home, the “lipstick effect” has somewhat lost its effect. Instead, many people use “Eyeliner Effect” when consumers use this product more when wearing a mask or sitting in a remote meeting.

“I usually put on lipstick after I eat or whenever I feel like the color has faded. But now I don’t do it anymore because I always wear a mask. Instead I care more. to eye makeup, because that’s what other people can see,” shared Kim Min-jeong, an office worker in Seoul.

Fortunately, the opening of economies as well as a gradual return to normal life has stimulated lipstick sales again. Now, despite high inflation, middle-income people still spend a certain amount on cosmetics, lipstick, and perfume to temporarily forget financial pressure.

https://cafebiz.vn/hieu-ung-son-moi-chien-thuat-marketing-king-dien-cua-nganh-my-pham-thoi-lam-phat-20220606112620761.chn

https://cafef.vn/hieu-ung-son-moi-chien-thuat-marketing-king-dien-cua-nganh-my-pham-thoi-lam-phat-20220606144011696.chn

You are reading the article The classic marketing tactic of the cosmetic industry in the time of inflation
at Blogtuan.info – Source: Afamily.vn – Read the original article here

Back to top button