The Lipstick Index Redefined: The Resilience of the Beauty Industry in 2022

May 24, 2022

With the 2020 pandemic came fewer places to go and way less socializing, but that didn’t stop people from wanting to feel good at home in order to feel a sense of normalcy. Actually, it’s during such difficult times (recession, world tragedy, and of recent – a global pandemic) that the Beauty Industry in particular has proven to be resilient while other consumer product industries tend to suffer. Perhaps it’s because looking and feeling good never goes out of style, even during times of adversity. A passion for self care tends to emerge during times of turmoil, and this held true even through the COVID-19 pandemic.

In fact, The Lipstick Effect, a term coined by Leonard Lauder in 2001 to describe the influx of makeup sales (particularly lipstick) during the recession, is still used today as a barometer of consumer confidence during periods of economic turmoil. This phenomena suggests that people will continue to buy cosmetics in most all categories (lip, nails, hair color etc.) despite economic shifts.

This index however had never seen the likes of a global pandemic like COVID-19 and the mandatory face-coverings that resulted. Buying a tube of lipstick was suddenly pointless given that masks obscured our noses and mouths. The demand for products such as lipstick, lip glosses and even foundations that many once considered an essential part of their daily beauty routine, were no longer a purchase priority. In fact, sales in categories such as foundation and lipstick were down by more than 70%. For these reasons, during the pandemic, in place of the lipstick index, a new index emerged: The Fragrance Index. 

Fragrance returned in a big way, leading to the biggest boom in sales in years! “Fragrance sales were up 45% in the first quarter of 2021 versus the year prior,” according to data from the market research firm NPD Group, and sales continued to trend upwards. This left many experts perplexed, yet there was good reason for this unanticipated surge. Fragrances can be nostalgic and therefore have the ability to bring back memories of happy times, places and experiences. It is believed that consumers were looking for ways to boost their moods and create a sense of restored happiness which is one of the strongest reasons they turned to fragrance more than ever during the pandemic.

Yet as times continue to change and consumer needs evolve, so do the demands of the resilient Beauty Industry. Masks off, lipstick on! As mask mandates recede and society begins to reopen, consumers are back to wanting to buy beauty products they haven’t touched in over a year. The color makeup category has been on its road to recovery and lipstick sales in particular are recovering at record speed with revenue up 48% in the first quarter of 2022, versus last year. Lip color is once again becoming a go-to, feel-good item that people are turning to for emotional comfort. Consumers seem to be celebrating newfound freedom by buying a new lipstick which may be a positive sign of the times and a hopeful indicator that things are slowly returning to a new sense of normalcy.

 

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