What the purchase of small luxuries tells us about the economic health of the country.
During economic downturns, people cut back on big purchases but still indulge in small luxuries—like lipstick. This phenomenon, known as the Lipstick Effect, highlights how consumer spending shifts in tough times. But why does this happen? And what does it reveal about human psychology and the economy?
When times are tough, big splurges take a backseat—but beauty counters stay busy. The Lipstick Effect is a fascinating economic and psychological trend devised by Juliet Schor in the early 2000s, where consumers ditch expensive purchases but keep treating themselves to small luxuries, like new lipstick or perfume. But why do we spend this way, and what does it reveal about our financial habits?
With inflation and the cost-of-living crisis reshaping consumer behaviour, some industries are struggling—yet luxury beauty sales are booming. In 2023, L’Oréal saw a 7.6% sales increase, even as other markets faltered (Financial Times). This audio documentary dives deeper than the usual “retail therapy” explanation, uncovering the psychology and strategy behind this resilient spending trend.
Featuring expert insights from:
💄 Arabella Simmons, Consumer Behavior Specialist – Breaking down the psychological triggers behind small indulgences, from self-esteem boosts to aspirational branding.
💰 Roberta Renton, Strategic Financial Manager – Exploring whether the Lipstick Effect is a harmless mood booster or a warning sign of financial instability.
This piece uncovers why, when money’s tight, a little luxury still goes a long way.
Feature Image by Etienne Girardet via Unsplash CC.