Dien Rice
January 2, 2009, 05:12 PM
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/financetopics/recession/3899999/Lipstick-effect-in-full-swing-economists-say.html
http://www.theage.com.au/news/lifeandstyle/beauty/the-kiss-of-economic-death/2008/12/22/1229794327006.html
http://www.huffingtonpost.com/meredith-barnett/the-lipstick-effect_b_92597.html
It's an example of the type of business that can prosper in a "downturn"...
Any other ideas or examples?
Dien
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/financetopics/recession/3899999/Lipstick-effect-in-full-swing-economists-say.html
http://www.theage.com.au/news/lifeandstyle/beauty/the-kiss-of-economic-death/2008/12/22/1229794327006.html
http://www.huffingtonpost.com/meredith-barnett/the-lipstick-effect_b_92597.html
It's an example of the type of business that can prosper in a "downturn"...
Any other ideas or examples?
Dien
