The new ‘red lipstick effect’- consumers still invest in beauty amid the pandemic

A look at the freshly released 2020 Q1 financial results from the international giant L’Oreal shed some light on the way consumer spend their money amid the COVID-19 crisis. Credit: chanonnat srisura via Shutterstock.

The global pandemic brought several social and economic implications that inevitably affect consumer demand for beauty products. A look at the freshly released 2020 Q1 financial results from the international giant L’Oreal shed some light on the way consumer spend their money amid the COVID-19 crisis. Despite an overall -4.8% decline of sales, a sharp 52.6% spike of e-commerce worldwide and substantial 6.4% sales growth in China suggest that the famous “red lipstick effect” may be set for a big comeback.

“Red lipstick effect” sees consumers spend their money on “affordable luxury” items during economic downturns. Social distancing measures bring a new meaning to this phenomenon. Instead of buying the proverbial lipstick, consumers are likely to turn their attention to products available online, that enable them to perform beauty treatments to look (and feel) good at home. Nail polish, hair colour, and skincare treatments top the list, as suggested by Google Trends. Online searches for “gel nail kits” have increased over fivefold in the space between the week commencing March 1st and April 5th, while searches for “beauty face masks” and “hair dye” multiplied over two-fold in the same period, in all cases reaching their five-year peak in April 2020.

This should be no surprise. According to GlobalData, in 2019, 71% of men and 79% of women globally said that feeling physically attractive is either very important or important in creating a feeling of wellbeing or wellness*.

This attitude is unlikely to change drastically even during the lockdown, pushing demand for beauty products that can be used at-home with a “salon-like” effect. A number of new launches cater to that need. Sally Hansen has unveiled a Miracle Gel nail top coat that only needs natural light to work and no led lamp for a salon-like matte manicure. Vichy offers a new Mineral 89 face mask consisting of a separate fabric mask and skincare solution that can be “freshly mixed by you” during a two-step beauty ritual. The Gypsy Shrine brand targets experimental shoppers with colourful hair dye drops that allow multiple uses and customized colour intensity, mimicking a personalised hair salon experience.

With social distancing measures set to remain in place for weeks or even months to come, consumers’ new purchasing habits may solidify even further. Online beauty shopping and at-home treatments are likely to become the go-to indulgences in times of crisis. Shoppers’ desire for professional quality treatments and new consumption experience is likely to drive the “red lipstick effect” in its new form.

*GlobalData’s 2019 Q3 global consumer survey.

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