Cosmetics is one of the most powerful categories in the world. In the 1930s, during the Great Depression, cosmetics still managed to hold stable, even as unemployment in America was at its worst, with 25 percent of the country unemployed. Cosmetics has survived multiple wars, presidential scandals, and notably the Great Recession of 2008.
As a recession looms over the heads of the global economy, everyone from economists to politicians is playing “are we in a recession, or is it on the way?” Meanwhile, individual industries are trying to brace themselves for another economic downturn after they already survived the worst of COVID-19. There is one power player that might not have to worry at all, and that’s the beauty industry.
Can beauty weather the next economic downturn?
Historically, beauty has been recession-proof. In 2001, when there was a recession, the discussion of the “lipstick index” began. The lipstick index is defined as a phenomenon that proved that despite the state of the economy, the beauty industry is immune to domestic and global economic woes. A Money magazine study once revealed women spend an average of 15,000 dollars on beauty products within their lifetime. The average transaction at a cosmetic counter is 43 dollars.
Why can’t most consumers live without their makeup? Most consumers say they feel negative when they aren’t wearing makeup. Also, during times of economic downturn, people are seeking jobs, and they want to make sure they are presentable for job interviews. Something as simple as a few dabs of concealer is proven to boost confidence.
Cosmetics saving grace is also the price. Historically, consumers can still afford things, like lipstick and mascara, even though money might be tight for larger purchases like a home or new car. While some are on the fence about the recession and the idea of beauty being recession-proof, certain beauty categories are a shining beacon in an otherwise murky economic climate.
Tinted moisturizers, eyebrow products, and lip glosses are strong performers right now. Outside of makeup, skincare should be where beauty companies are investing next. The category has seen impressive growth, generating 136 billion dollars in revenue in 2021.
Despite how some might view the beauty industry as a luxury, for many, it is considered a necessity. From the social pressures of beauty standards to wanting to look good for social media, beauty is a category essential to some people’s mental health and well-being. Beauty products are one of the most inexpensive ways for people to pamper themselves, forgoing the price of spa days, vacations, or full-scale anti-aging treatments, which can cost hundreds of dollars per session.
The good news for beauty service companies, like manicurists, facialists, etc., is that these types of services also have built-in renewal. It will only be a matter of weeks before things like an acrylic manicure need a refill, or eyebrow stubble needs to be done away with.
Beauty is also considered one of the few recession-proof careers. Due to the industry’s ability to weather the economic storm, it’s a safe bet for many looking at a career that won’t be subject to economic turmoil.
While companies are cautious about the state of the economy, beauty looks to continue its history of withstanding the worst of a recession. That is the magic of makeup.