Glenvale Publications Power Magazing
Article Search

Article Archive

Home | | Read more articles | | Email Article |

EXCLUSIVE TO THIS WEBSITE:Lipstick - Your Strategy for the Future?

By John Stanley ReThink Retail When I was a lad, economists often judged the state of the economy based on the hemline of women’s skirts. When times were good the hemline went up, ie the mini skirt of the 60’s, when times were bad the hemline went down. The hemline is no longer a fashion statement, women wear clothing that suits them whatever the state of the economy.

Helena Rubenstein, last century, predicted that when times were tough cosmetic sales would always increase as it was an affordable luxury. She was right. In 2001, Leonard Lauder, the Chairperson of Estee Lauder noticed that after September 11th lipstick sales shot up. The Lipstick Indicator proved a more reliable judge of the state of the economy.

In 2008 in Australia lipstick sales have increased between 25% and 50% over the previous year and newspapers such as the New York Times have started publishing articles such as ‘Hard Times, but your lips look great’ (by Kalveen Schaefer, May 12, 2008).

You may say you don’t sell skirts or lipstick so what has this got to do with you. Well I would say that it has a lot to do with every retailer. In these challenging times you need to be aware of the Lipstick Indicator and apply it to your own business. Before we look at your business, I should firstly explain why lipstick sales have increased.

Ignore Lipstick Scales at your Peril

If you ignore the trends taking place, you could end up with a warehouse of products that are not selling. Consumers will look at your product range and get the impression that you’re out of touch with their needs and wants. I agree, the result may have to be a sale of the slow moving items, but this may also give the impression that you are even more out of tune with the consumer. It could do more damage to the business image!

Put Your Lipstick Strategy into Place

Whether you believe in the lipstick theory or not, it is the message behind it that is critically important. The American chief economist for Wrightson ICAP, Lou Crandell, sums it up distinctively.

When the family budget gets squeezed there are three types of products that increase in sales.

  • Inferior Goods. This is where the consumer starts buying, cheaper replacement products. This does not mean your gross profit has to decline, it may in fact increase. To use Lou’s example, the consumer may buy fish every week. Iin the good times they may buy Salmon but in harsher times they will start purchasing a cheaper fillet of fish. This means you need to analyse your product range and start promoting the replacement products. The quality and freshness may still be there, as I mentioned you may be able to increase your gross profit, but the consumer is purchasing a cheaper alternative.

  • Small Indulgencies. This is where the consumer completely changes their luxury spending. They move away from big-ticket items and start spending on cheaper indulgences. For example they may switch from buying expensive handbags towards buying lipstick. In this situation you need to carefully analyze your product mix. It may be time to get out of the expensive, high ticket, indulgent product ranges and introduce cheaper indulgent ranges to satisfy your consumer’s needs.

  • Moral Booster Products. Whatever the state of the economy or the world, people still need to cheer themselves up. The movie industry has had a morale-booster product all along. During the war years people went to the movies to laugh at Charlie Chaplin, Buster Keaton and akin. The movie industry is again seeing resurgence in ticket sales as people start flocking back to the movies for an economical way to cheer themselves up.

    What are your morale boosting products?

    Look at your product range. What are the morale booster products (they may also be indulgence lines)? It may be cheap bunches of flowers, a flowering indoor plant or a brightly coloured shirt (note that brightly coloured floral shirts are back in for men). Once you have identified your ‘lipstick’ lines they should be promoted to encourage sales. By promoting these lines you will indicate to the consumer that you are on the same wave length as they are. Promoting expensive luxury lines as a special may indicate your business is in trouble.

    All these economic indicators are showing a shrinking disposable budget for the average consumer and your marketing strategy needs to take this into consideration.

    Your Lipstick Checklist

    1. What high price items should you reduce stock levels of?

    2. What ‘Inferior Goods’ items should you be promoting?

    3. What new Indulgence lines should you be introducing into the product mix?

    4. Have you got morale booster products in key sightline position (or sale products)?

    5. Is your team geared up to address the needs of the new consumer?

    John Stanley is an internationally recognised conference speaker and retail consultant. He has authored several successful marketing and retail books including the best seller Just About Everything a Retail Manager Needs to Know. John’s retail experience covers hands-on retailing in supermarkets, hardware stores, garden centres, farmers markets and drug stores. For more information on John Stanley and how he can help your business prosper and grow, visit his website

    Lipstick for Men

    Don’t assume that the change in consumer attitudes is only with women or that this does not open up new business opportunities.

    Anne Harding and Stan Crinis of Melbourne, Australia have identified a business opportunity based on the lipstick factor.

    They believe suit sales will decrease and that men’s lipstick products are ties and socks. But, it is rare to see them as a matching combined unit. They have therefore developed a new brand, Stanley Lewis, where they sell $295 box sets of one tie and two pairs of socks.

    They plan to start seasonal collections and encourage men to buy a new range every quarter.

    A great “Lipstick factor” concept which is a completely new product.

    Ref: The Weekend Australian, July 19-20, 2008

  • Top | | Read more articles | | Email Article |

    This web site is supplied strictly on the condition that Glenvale Publications and Greenworld magazine, its employees, agents, authors, editors and consultants are not responsible for any deficiency, error, omission or mistake contained in this web site, and Glenvale Publications and Greenworld magazine, its employees, agents, authors, editors and consultants hereby expressly disclaim all liability of whatsoever nature to any person who may rely on the contents of this web site in whole or in part. No portion of this web site, in whole or in part, may be reproduced without the written permission of the publisher.

    Get a sample issue now!