Sunday, February 15, 2009

Lipstick Effect !

During recession , all sectors take a bad hit and sales slump.
But its interesting to note that there is a phenonmenon that emerges in business during these dull times.
It's the famous 'Lipstick Effect'.
The "lipstick effect" can be traced back to the Great Depression of the 1930s. In the four years from 1929 to 1933, industrial production in the US halved, but sales of cosmetics rose.
Women who could not buy expensive fashion wear cut back on thier spending and instead looked upon lipsticks to keep their fashion quotient up!
Here's one of the definition I found :
lipstick effect n. During a recession, the tendency for consumers to purchase small, comforting items such as lipstick rather than large luxury items.
Its been validated from the sales of some of the big cosmetics major like L'oreal,Avon,Beiersdorf etc. during recession times.

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