Back in 1999, former Harvard University Professor, and now Professor Boston University, Juliet Shor introduced the ‘lipstick effect’ theory in her book entitled The Over Spent American (1999). Her thesis:
Consumers will buy higher-priced, more prestigious lipsticks, specifically Chanel, that are used in public, vs. lower-priced, less prestigious brands that are used in privacy of the bathroom. Further in times of economic troubles, consumers will indulge in ‘little’ luxuries, like Chanel lipstick, instead of expensive luxuries, like Chanel suits or handbags.
Adding supporting evidence of the ‘lipstick effect,’ Leonard Lauder confirmed that sales of his company’s lipstick rose after 9/11 terrorist attacks in a New York Times article published May 1, 2008.
Is the ‘Lipstick Effect’ True?
Question today is whether the “Lipstick Effect” is still true. It proposes two basic premises:
- Premise #1: That luxury is purchased primarily for status & prestige
This is only true for some people, some of the time, which is why I reject the label “Aspirational Customers” that people in luxury circles use for those with lower income. I favor the demographically-grounded term, HENRYs (high-earners-not-rich-yet) who are quantified by income ($100k-$$249.9k) and so can be studied, measured and targeted.
- Premise #2: In times of economic turmoil & uncertainty – like today — do consumers opt for ‘little luxuries’ rather than ‘big luxuries’?
The answer to this is “YES!”
How to Add Value to Your Beauty Brands – Tell a New Story of Luxury
Today the old ideas about luxury, like the increasingly outmoded idea that people buy luxury for status and prestige, just don’t connect with young affluents with money to spend, but in search of luxury brands that reflect their values and respect their ideals.
Luxury is just a marketers’ term that means something is overpriced and too expensive.
The young HENRYs are skeptical about the term ‘luxury’ and increasingly believe it’s a word used by marketers to sell something overpriced or too expensive. HENRYs think that simply calling a brand ‘luxury’ doesn’t necessarily make it so, as this young HENRY said, “Luxury is just a marketers’ term that means something is overpriced and too expensive.”
For young HENRYs old luxury has taken on many negative connotations:
- Conspicuous consumption
- Only for the wealthy 1%
New luxury stories connect with younger consumers mindset which is:
- More affordable
Our job, therefore, is to create new and compelling reasons why luxe beauty brands offer something meaningful and important to the next generation of affluents. We must tell new stories of luxury that connect with the younger affluents values.
Luxury is a mindset, not a brand or a price point. This new white paper, Marketing Luxury Beauty in a Brand New Style, will show you how to connect your beauty brands with young HENRYs through new stories of luxury.