Sales of beauty products get boost from recession

NEW YORK, July 5 Fri Jul 6, 2012 2:26am IST

NEW YORK, July 5 (Reuters) - Tough economic times are boosting sales of beauty products and designer jeans as women put more emphasis on looking good and attracting a partner, according to a university study.

Researchers in Texas found that a downturn in the economy has a positive impact on the beauty industry, in what has been dubbed the "lipstick effect" and that price is not an issue.

"Although both men and women downsize consumer spending in response to recession cues there is an exception to this and this is beauty products," said Sarah E. Hill, an assistant professor of social psychology at Texas Christian University in Fort Worth.

"Women have an increased desire to purchase these products in response to recession cues," she added. "Even though they are closing their purse string for other things, they are wanting to splurge on things that can make them attractive."

A downturn in the economy has been linked to an upswing in beauty sales since the Great Depression, according to Hill, whose research is published in the Journal of Personality and Social Psychology.

Figures from market research company NPD Group Inc support the phenomenon. Their numbers show that skin care, makeup and fragrance sales increased 11 percent in the United States in 2011 compared with the previous years.

China, Mexico and Argentina also had double digit rises in beauty product sales last year, while sales increased 9 percent in Britain and 3 percent in France.

Hill and her team examined how and why economic recessions influence women's consumer behavior in a series of experiments. They used real world spending data and asked consumers whether they would buy a series of products after giving them recession cues.

They found that men did not want to buy anything. Women also showed no interest in products that did not enhance their attractiveness.

"But we did find that there is this robust lipstick effect," she said.

Hill believes it is the first time the lipstick effect has been demonstrated in experiments and that it is driven by a desire attract a partner.

"Women consciously want to do something that makes them feel good about themselves, but ultimately we found that it is these things that make them feel good about themselves that make them more attractive to mates," she added. (Reporting by Patricia Reaney; editing by Christine Kearney and Andre Grenon)