Lipstick index: Adobe sees consumers covet high-end cosmetics while pinching pennies with groceries

28 Jun 2024 --- Adobe Analytics reports a shift in spending habits whereby consumers continue to seek high-end cosmetics while being budget-conscious in other areas. 

Adobe Analytics tracked 100 million SKUs in 18 product categories and examined over one trillion visits to US retail websites. The analysis tracked the percentage of units sold, comparing April and May to January levels.

The results showed a noteworthy trend: consumers were willing to “trade up” with expensive cosmetics such as fragrances and lipsticks, which sold out quickly in the cosmetics category. On the other hand, consumers opted to save money on items like electronics, clothing and groceries. 

The percentage of less expensive products rose for the majority of categories, including apparel (up 4.7%), electronics (up 5.3%), and personal care (up 4.2%). The proportion of the priciest products in the larger personal care category dropped by 10.8%, except fragrances and lipsticks. 

In fact, the percentage of expensive fragrance products increased by 19.4% in April and May versus January and by 9.9% year-over-year. Thanks to the “trading up” trend, online fragrance sales increased, with daily sales rising by 27% year over year and by 53% from April to May.

Similar trends were seen with lipsticks, where the share of the priciest items rose by 18.1% annually and 37.1% from April to May. As a result of this preference, sales of high-end lipsticks increased by 49% between April and May 2024 and by 27.7% over the previous year.

Purple-toned lipsticks have increased by 103% year-over-year sales.Lipstick indexThe data comes as consumers continue to battle high inflation. The term “lipstick index” was coined by former Estee Lauder chairman Leonard Lauder to describe the sale of cosmetics during the early 2000s recession. Lauder said cosmetic purchases — especially lipsticks — tended to be inversely related to the economy, with women replacing more expensive purchases with smaller luxuries such as cosmetics.

According to Adobe Analytics, consumers spent US$35 billion on cosmetics online in 2023, a notable 15.6% year-over-year increase. The category saw US$16.3 billion in online spending in the first five months of 2024 (January to May), a rise of 8.8% over the previous year.

Pink tones saw a 61% increase in sales year over year, while purple tones, such as plum and mauve, increased by 103%. Popular finishes like satin, matte and glossy contributed to the growth, with gains of 35.5%, 35.2% and 21.7%, respectively.

Lip gloss sales rose 31.4% year-over-year, setting and finishing products increased 18.4%, and mascara sales rose 8.6%. Concealers and foundations saw an 8.3% year-over-year increase, while nail polish sales grew by 5.1%.

Additionally, Adobe’s data showed a 51.5% increase in sales year-over-year, indicating a trend toward subtle and lightweight foundation and concealer products, with sheer finishes and skin tints growing in popularity. Plumping lip gloss remained popular, with sales up 60%, while lengthening mascara sales jumped 30.9%.

Adobe predicts the cosmetics industry will continue to grow strongly through the year, with sales driven by coveted items, such as Laura Mercier Translucent Loose Setting Powder, Sol de Janeiro Perfume Sets, Clinique Almost Black Honey Lipstick, Charlotte Tilbury Pillow Talk Plumping Lip Gloss and Summer Friday’s Lip Butter Balm.

In similar findings, Bain & Company and the Italian luxury goods manufacturers’ industry association, Altagamma, told Personal Care Insights that the first quarter of the year saw a slowdown in the luxury market across most regions amid macroeconomic pressures.

By Venya Patel