The economic indicator, also known as the Lipstick Index, describes the behavior pattern of consumers purchasing small indulgences during times of financial stress to uplift their mood
As 2022 marked a record 40-year high for inflation, the phenomenon is in full swing. In June, global market tracking firm NPD Group reported that lipstick and other lip makeup grew 48% YoY in Q1, twice as fast as beauty categories, with prestige labels claiming market share over mass brands.
EDITED data backs up lipstick’s recession-proof quality. Each month, the number of items that completely sold out online has consecutively outpaced last year. July has been an exception as sell outs marginally dipped 2% YoY.
Regardless, 2022 lipstick sell outs are up 7% YoY and prices haven’t budged – the average cost is $24 in the US and £23 in the UK, on par with 2021.
While lipstick prices remain stable, the beauty industry isn’t immune from inflation. Higher production and shipping costs have led to Glossier and e.l.f. Cosmetics announcing price hikes of between $1-$4. So, which categories have been affected?
In the US, prices for bath & body and makeup products had the lowest change, with average prices increasing by less than $1 YoY. Haircare and toiletries saw the most considerable upswing, with average prices rising between 11%-12%.
Greater instability was witnessed in the UK, tacking on to the beauty industry’s rising costs and legislation post-Brexit. Bath & body and skincare currently have the most significant average price discrepancies, retailing 66% and 47% higher than a year ago.
Given the past chaotic few years, the cost of living crisis won’t erase consumers’ desire to treat themselves. However, as inflation takes hold, beauty retailers need to develop airtight strategies to remain competitive and protect their bottom line.
This is where EDITED comes in. Get in touch today to see global pricing solutions with real-time data.
Enjoyed this? There’s more! With shoppers relying on Dopamine Dressing now more than ever, revisit our podcast episode with Shakaila Forbes-Bell on the psychology of fashion and its impact on consumer behavior.