The desire to indulge still exists despite covid-19’s impact on incomes. What do you do to make yourself feel better during a tough time in your life? Do you book a quick weekend away with your friends? Go on a spa day? Or treat yourself to a fancy dinner? Maybe you go to your favourite store and buy yourself those shoes you have been eyeing for a few months?
There is a theory that suggests that during economic downturns and recessions, people gravitate towards spending more money on small indulgences to make themselves feel better about a bad situation. This phenomenon is known as the “lipstick effect”, and covid-19 should be the perfect environment for it to thrive.
The covid-19 pandemic, however, seems to be different from the economic downturns of the past. Instead of reaching for the lipstick on the counter, people have redirected their indulgences from luxury beauty products to skincare, haircare and even home improvements.
The shutdown of all non-essential businesses during hard lockdowns forced many to close down and retrench employees, leaving long-lasting economic effects.
A media statement by StatsSA released on May 20, 2020 says that “8.1% of respondents [of a survey] reported that they lost their jobs or had to close their businesses, while 1.4% became unemployed” due to the impact of covid-19. Along with that, 25.8% of respondents reported an income decrease during the hard lockdown.
As lockdown regulations have begun to ease, many people seem to have taken the opportunity to indulge themselves in other ways, simply as a way to escape the reality they are living in.
Enter the lipstick effect.
While the name of the theory came to be after the high-end cosmetic company Estee Lauder stated that its lipstick sales went up during a time of economic crisis in the early 2000s, some scholars have seen similar instances of the effect dating back to the Great Depression.
Jannie Rossouw, a professor at Wits Business School, gave an in-depth explanation of the theory. “As people have less money to spend, sometimes they want to indulge. They buy small things as a form of indulgence,” he told Wits Vuvuzela.
Vanessa Plaatjie (31), a business owner and social media beauty influencer, explained the importance of indulging oneself during a period of economic difficulty, such as covid-19.
Plaatjie said that, even though people are staying home more often, it is still important to treat yourself to some of your favourite things, even if it is just to make you feel good. Plaatjie enjoys treating herself to her favourite fragrances, such as Yves Saint Laurent’s Black Opium (which ranges in price between R1 000 and R2 000) and Carolina Herrera’s Good Girl (R1 200 – R3 000).
Gabrielle Georgeson (25), a second-year BA student studying strategic brand communication at Vega, strongly supports the idea of treating oneself to small indulgences.
“The smallest things matter right now. We are surrounded by disease, fatigue and stress. Buying something small is the only indulgence now that we do not have to feel guilty about,” she said.
According to Rossouw, the lipstick effect would not materialise if all luxury items maintained strong sales during an economic downturn, meaning no money is taken away from necessities to spend on luxuries such as makeup or clothes.
Although the lipstick effect shows people tend to indulge in beauty products when they have less money, sometimes that is not the case, as the covid-19 pandemic has proven.
The theory’s name seems to be contradicting itself during this time, as people turn away from heavy make-up and towards other luxury indulgences.
Nqobile Dludla (29), an independent analyst, said beauty sales in South Africa decreased dramatically after the hard lockdown forced beauty retailers to shut down, as they were deemed non-essential.
An article by The Guardian explains that sales of designer brand makeup plummeted by 40% in the United Kingdom in the year 2020, due to the fact that women were wearing less makeup as face masks became mandatory.
Interestingly, research conducted by the management consulting firm McKinsey & Company found that although most cosmetic and fragrance sales declined, eye makeup sales in South Korea seemed to increase drastically, again because mandatory face masks leave women with only their eyes to doll up. This sales increase gave the beauty industry the small facelift it needed during the pandemic.
The consulting firm also reported that there was a sizeable increase in sales of skincare and bath products, as the self-care trend took over the world during lockdowns, people looked to routines such as ‘‘self-care Sunday’’ to boost their moods.
Dludla said there has been a high increase in skincare product sales in South Africa. She explained that, rather than buying expensive makeup, people now tend to buy expensive skincare products because of common problems like “mask-ne” – acne as result of irritation caused by face masks.
A CNBCAfrica report found that another area showing increased popularity in South Africa is home improvement, as more people have begun working from home permanently. Obviously, the more you stay home, the more comfortable you want to be.
“The principle has now been taken further than lipstick only. We now see it in different things,” Rossouw said.
“People who cannot travel abroad go for a nice holiday in South Africa. People who cannot afford an expensive holiday will go for an expensive lunch or dinner. It manifests in different ways for different people, depending on the financial situation of each individual.”
Despite the different form the lipstick effect seems to have taken during the covid-19 pandemic, it seems to have had a positive and long-lasting societal effect.
“In my view, it [the lipstick theory] is positive if it raises the spirit of people – if it makes them feel better, then it is a good thing,” Rossouw said.
FEATURED IMAGE: The lipstick effect is a phenomenon that commonly occurs during economic downturns. Photo: Tshiamo Moloko
- Wits Vuvuzela, FINANCE FEATURE: Don’t fumble the bag – Lockdown’s online influence, November 2020
- Wits Vuvuzela, EDUCATION FEATURE: Covid forces teachers in training to go online, October 2020
- Wits Vuvuzela, HEALTH FEATURE: Building immunity during the pandemic, November 2020