Nearly 50% of shoppers plan to spend less on beauty items this year.
During tough economic times, how people spend on beauty products can often indicate where the markets are going — while logic would suggest that sales of lipsticks, perfumes and other “frivolous” products drop, purchases of such “small luxuries” actually tend to increase.
Estee Lauder (EL) – Get Free Report heir Leonard Lauder first coined the term “Lipstick Index” (sometimes also known as the “Lipstick Effect”) to describe this phenomenon amid the recession that followed the dot-com bubble in the 1990s.
While we’re not yet in a recession, a survey of 1,011 Americans aged between 18 and 76 found that 48% plan to spend less on beauty products during the current year.
The survey done by beauty trends site StyleSeat further found that 64% said that inflation affected their spending on beauty products while one in three check for better prices in other stores or websites before making a purchase.
The Lipstick Factor Is Extending To Some Other Popular Beauty Products
None of that, however, transfers over into certain beauty items and procedures. The survey found that beauty procedures consumers do regularly were ones they were least likely to cut back on — various eyelash extension and tinting services were rated as the last thing to be cut for financial reasons.
Fillers, or an injection used to fill certain facial lines and smooth out irregularities, were the second least-likely to get cut while hair removal, tanning and Botox procedures all landed in the top five.
“Although lashes are the last beauty item or service consumers would cut out of their budget, a person’s face is clearly a priority,” write the survey’s authors. “Maintaining a flawless smooth face is so essential that fillers are the second-to-last beauty service people would cut back on.”
Instead, beauty customers are cutting back on the number and types of makeup products they purchase — the wide category of makeup scored first as most likely to be cut while 64% said they are now more likely to look for dupes to high-end products.
This Is Why Beauty Spending Has Not Been Tanking In 2023
Another 58% are shopping at outlets, online marketplaces or other discount options instead of buying it directly from the retailer.
Nail and hair salon services, hair care and skin care all landed in the top five of beauty services U.S. consumers are most likely to cut back on amid rising prices.
Nearly 70% of respondents plan to spend less than $50 a month on fashion and beauty items per month. While thrift stores are a popular option for apparel and footwear shopping, beauty shoppers looking to save money are far more likely to use cashback sites (71%), shop at an outlet or clearance section (58%) or look for the aforementioned dupes.
“Despite these money-saving strategies, 79% of Americans admitted to making an impulse beauty or fashion purchase […],” write the StyleSeat authors. “Some make purchases they can’t yet afford, with1 in 4 (28%) of our respondents using a ‘buy now, pay later’ service when purchasing fashion items.”
So far, major beauty product retailers like Ulta (ULTA) – Get Free Report and LVMH (LVMHF) ‘s Sephora have fared quite well despite a decrease in spending in other sections of the economy. Shares of both companies are up by more than 12% since the start of 2023 as many choose smaller pick-me-ups in favor of larger purchases during uncertain economic times.