Username: PrettyWoman Rating: Asked to: Goro Yang Date Created: 07 Aug 2018 |
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Category | 28 |
Tag | Financial |
Question | What is the 'Leading Lipstick Indicator'? |
Hello PrettyWoman, Leading Lipstick Indicator is an economic indicator which suggests that consumers turns to less expensive indulgences, such as lipstick, when they do not feel confident about the economic future. This indicator, sometimes also called the Lipstick Index, was initially proposed by Leonard Lauder, chairman of Estée Lauder, in the wake of the September 11, 2001 terrorist attacks. Lauder noticed that in the months following the attacks, his company’s lipstick sales doubled. Further research demonstrated that historically, surges in lipstick sales occurred during difficult economic times, revealing the Leading Lipstick Indicator to be a relatively reliable metric for determining consumer confidence. While the Lipstick Indicator is not an precise measure of whether a recession is looming, it marks a shift in consumer confidence, as consumers, particularly women, will forego more expensive luxury purchases, such as clothing and accessories, in favor of a less expensive product, such as lipstick. |
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