The economic downturn has hit hard since 2008, unemployment for 16-25 year olds is at a record high and the cost of living has risen dramatically. So why is it that the cosmetic industry has remained relatively unscathed?
Following the events of September 11, the American economy dipped by 25%, but lipstick sales soared by 11%. This economic trend sparked the “Lipstick Index”, termed by Leonard Lauder, son of Estée Lauder and chairman of the company, which has since been used to describe increased sales of cosmetics during the recession.
Lauder believed that lipstick sales could be used as an economic indicator on the basis that lipstick sales appeared to be negatively correlated to economic health. Treating ourselves to a new product seems more affordable than a £30 pair of shoes, hence why the cosmetic industry remains stable, enough so that the Stila brand re-launched in 2011, after it folded in 2009.
As a whole, society is far more looks-conscious than ever before, but rather than parting with our make-up, we have preferred to tighten our purses when it comes to clothing, with a drop in retail on average of 1.58% in the last quarter of 2011, 6% in the third and 3% in the second quarter compared to 2010.
Premium beauty equates for a large percentage of the industry, and by 2014 is expected to make over $2.6 billion in five years, this would mean a growth of 40%. This evidence may be used to confirm Lauder’s lipstick index.
However, though the cosmetic industry is soaring, the lipstick index could be a thing of the past. In an interview with Time Magazine, Leonard Lauder declared that “Nail polish has become the heir to lipstick in the recession”, sales of the product were up by 54%, compared to the 11% for lipstick, in the past year.
Nail varnish trends including multi-coloured ‘minx’ nails, iridescent shades and crackle-effect varnishes have taken over the catwalks in the past seasons, compared to statement lips and eyes of the mid noughties, and this trend has become far more accessible. In addition to this, it is much more purse-friendly than lipstick, which, for a good quality one, can set you back up to £20 compared to a few pounds for good-quality nail varnishes.
Every season there is a trend palette of colours for nail varnish, usually campaigned by the likes of Chanel or Dior, and designer nail companies such as OPI, Nails Inc and Essie. Long gone are the days when the average collection was made of a red, pale pink and beige, this seasons palette comprises of pastels such as lilac, mint green and rose-pink, or aquatic like Chartreuse (yellow-green), turquoise and coral, whilst art trends include checks, stripes and lace lattice.
Nail varnish is much more accessible and easy to recreate for the highstreet than lipstick, nail trends change every few months, whereas red lipstick is a timeless product. High end products retail for£10-20, but are being closely replicated by British brands such as Barry M, 17, and Topshop, retailing for about £3-6. This price gap certainly suggests why the sales of nail varnish are up, for the price of one designer brand, you can buy three or four for the same price if you opt for a high street brand. Also the increase in technology has resulted in glitter, crackle and magnetic finish designed by Nails Inc, activated by a magnet in the lid to create a unique wavy finish, spurring on even more trends, and therefore an increasing profit development for nail varnish.
It’s not just the sales of nail varnishes affected by the slow economic recovery. We as consumers expect more from our products to create timeless beauty, such as beautiful long and thick lashes. Mascara sales are up, with developments in brands such as; Benefit “They’re real” mascara, Clinique’s bottom lashes mascara, and industry favourites such as Max Factor, Rimmel and Dior for dramatic and voluptuous lashes. Unsurprisingly, despite launches of new types of foundation and blemish balm creams, sales have remained fairly constant, as consumers showing unwillingness to part from perfect bases.
However another big change in the industry is the growth of skin care products, particularly anti-aging products. This trend supports the aim to remain youthful and ahead of early signs of aging. In 2010, Europe was the largest consumer of skin care products in the post recession spending €2.4bn. The timeless desire to look our best and have flawless skin shows no signs of stopping just because we have all had to tighten our purse strings.
Clearly we are not going to be safely out of the economic pitfall for some time, but we’re going to battle it out looking our best and crunching numbers with beautiful nails, keeping the cosmetic industry safely afloat. Whatever happens, our vanity and lust for products ensures that there is no slump in sight for the cosmetic industry, as make-up continues to be an everlasting trend.
