Anyone who ever questioned Leonard Lauder’s Lipstick Index of 2001 must by now be regretting their cynicism. When the Estée Lauder chairman noted that as share prices dive, lipstick sales – like risqué hemlines – soar, he encapsulated a theory that was to define the economy of the beauty industry for the next decade.
In fact, amid the continuing economic turmoil of 2012, it’s not only lipstick sales that are beating a glossy red path skyward. Thanks to today’s beauty-loving consumers, foundations are flying off department store shelves, BB (blemish balm) creams are booming, skin care sales are rising and perfume bottles are jostling for space in our bathrooms. Even nail vanish shades come with a waiting list these days.
“The beauty industry has led the way in furthering the UK’s links with international markets throughout the recession and is likely to play a central role in helping us to recover from the crisis,” says Carol Bagnald, HSBC regional director who oversees a broad spectrum of consumer lifestyle sectors.
According to Euromonitor, the estimated value of the global beauty and personal care industry currently stands at $426,373.2 million. And it’s the £6,191-million mass cosmetics market – added to that of the £2,768-million premium make up sector – that perhaps reveals most about our spending habits during a recession. If bank balances are shrinking, make-up bags are certainly bulging.
A slick of lipstick or a flick of eyeliner helps us escape when there’s little else to distract us from the economic situation
The supposition that consumers reach for affordable luxuries during times of financial cutbacks is nothing new. But what is it about cosmetics in particular that makes us powerless to resist?
“Instant gratification,” says Maleka Dattu, former senior vice president of Estée Lauder’s Origins and founder of independent retail consultancy Merumaya. “A slick of lipstick or a flick of eyeliner helps us escape, to transform our look and feel good about ourselves during a time when there’s precious little else to distract us from the economic situation.”
Offering us an entry point into a designer lifestyle is also undoubtedly what lies beneath our seemingly insatiable desire for lipstick – and, more recently, nail lacquer and fragrance too. While Euromonitor has seen a dynamic 6.5 per cent growth in the perfume market between 2006 and 2011, (the greatest across all beauty and personal care sectors), The NPD Group reports a 65 per cent increase in sales of nail products between 2008 and 2011.
Even if the £1,500 body-shaping YSL dress eludes us, a bottle of their La Laque Couture nail varnish or exotically oriental scent Opium is a good consolation.
The skin care market has experienced 5.7 per cent growth between 2006 and 2011 and is now estimated to be worth £2,203 million. Yet if glittering counters of cosmetics lure the fickle among us into trying new brands, when it comes to skin care, we remain faithful, says Ms Dattu. “Skin care is a long-term game. We place our trust in the brands we have a long-standing relationship with, believing they’ll bring about results in the future,” she says.
As a bathroom staple rather than a feel-good treat, Euromonitor reports that hair care sales have held steady rather than rocketed and, after a strong performance in the early recessionary years, growth in the grooming sector has slowed somewhat.
Yet it’s perhaps tanning products that have proven to be the greatest surprise. Market leaders St Tropez have seen sales and profits increase by 60 per cent in the last five years and now sell one Self Tan Bronzing Mousse a minute in the UK.
An ever-broadening consumer demographic is also helping to drive sales across all sectors. Not only are we being introduced to products in our teens, but an aging population also means we’re using them for longer.
In a world of gloomy financial uncertainty, there is every sign that the future of the beauty economy is as bright as the colours now lingering on women’s lips and nails.