This phenomenon explains why, even as the economy tanked, real estate foreclosures soared, and spending at restaurants and car dealerships plummeted, women still found ways to pay for lotions, hair treatments, lipstick, and other beauty products.
The StarTribune explores the largely recession-proof status of the beauty industry, which is on pace to hit $59 billion in the U.S. in 2012, up from $43 billion in 2006. Here’s how one economist describes the “lipstick effect”:
“It’s counterintuitive,” said Ken Goldstein, economist for the Conference Board, which publishes the U.S. Consumer Confidence Index. “In some cases, things are so bad and so tough that the consumer can’t go on vacation. She can’t buy a dress …. But at least she can buy some lipstick.”
In related news, last week the NY Times reported that flash deals for manicures, facials, hair salon services and other health and beauty products from group-buying sites like LivingSocial and Groupon are multiplying like nobody’s business:
According to Yipit, an aggregator of online daily deals, the number of sites offering health- and beauty-related services has nearly quintupled in the last year, to 341, while sales of these services (including spa treatments, dental whitening and hair salon services) reached $78 million for January to March of this year and are on track to reach $312 million for 2011, representing 31 percent of total daily deal sales.