'Lipstick Effect' puts gloss on cosmetics sales
In hard times, customers forgo big luxury items but spoil themselves with small pleasures
Hard-pressed consumers seeking small pleasures are lifting cosmetic sales even though they are skimping elsewhere, but not all beauty product retailers are hitting the right note with customers. "Makeup always does well in difficult times. Customers like to spoil themselves and even a great lipstick or trending nail polish colour does wonders to boost and uplift any consumer," an Edcon spokesman said this week. According to the theory of the "Lipstick Effect" - a term coined by Estée Lauder chairman Leonard Lauder - consumers are likely to cut back spending on more expensive luxury goods during tough economic times, but buy smaller items such as lipstick, which is viewed as an affordable luxury. Stefan Salzer, a partner and MD at the Boston Consulting Group, said most retailers had expanded into cosmetics to improve their sales performance. "If you think about the operational part of it, it's a difficult portfolio to manage; you have very small, high-value items, so you have supply ...
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