What is the "lipstick effect", and why is it important?

[Dien Rice]

In summary...

• In hard times, people don't want to spend the big bucks for luxuries.
• However, they still want luxuries to help "cheer them up".
• Hence, they buy more inexpensive "small luxuries" - like "lipstick". That's why it's called the "lipstick effect".
• For example, sales at L'Oreal (a cosmetics company) in the first half of 2008 were UP by 5.3%.
• This effect can be traced back to the Great Depression - so it's been happening in every downturn for a long, long time.

This suggests that a good business at the moment could be inexpensive "luxuries"!

Anyway, here are some articles to check out...

http://www.wordspy.com/words/lipstickeffect.asp
http://www.telegraph.co.uk/finance/f...mists-say.html
http://www.theage.com.au/news/lifean...794327006.html
http://www.huffingtonpost.com/meredi...t_b_92597.html

It's an example of the type of business that can prosper in a "downturn"...

Any other ideas or examples?

Dien