The lipstick index, a concept popularized by Estee Lauder chairman Leonard Lauder following the September 11, 2001 economic downturn, suggests that lipstick sales tend to increase during times of economic decline as people turn to small, affordable pick-me-ups. In 2020, amidst the Covid-19 pandemic, Estee Lauder’s CEO noted that the lipstick index had been replaced by skincare products due to mask-wearing and working from home. Recent data from Sephora and consumer research group Circana indicates a growth in prestige beauty sales, suggesting that the lipstick index phenomenon may be returning as the US emerges from the pandemic.
The CEO of Overeon, Neela Montgomery, has observed that the beauty industry has remained resilient during uncertain economic times, with prestige beauty sales outpacing mass beauty sales. This resilience may be attributed to the self-care aspect of beauty purchases, as well as the innovative and ever-evolving nature of the industry. Trends in beauty, driven by platforms like TikTok, play a role in driving sales, with a focus on clean, no-tox products and unique ingredients becoming increasingly popular among consumers.
The Federal Trade Commission is currently investigating a deal between Microsoft and AI startup Inflection, in which Microsoft hired Inflection’s co-founders and staff to lead its Copilot program. The investigation is centered around whether Microsoft’s investment in Inflection constituted an undisclosed acquisition. This probe comes as antitrust regulators are ramping up scrutiny of the AI industry, with plans to jointly oversee companies such as Microsoft, Google, Nvidia, and OpenAI to ensure competition and prevent abusive behavior.
Upcoming events in the economic calendar include Treasury auctions, the release of the OPEC Monthly Oil Market Report, the Federal Reserve’s interest rate decision and economic projections, and the release of consumer and producer price indices for May. Earnings from Signet Jewelers are also expected, along with reports from the Federal Reserve Board to Congress on monetary policy and economic developments.
Overall, the beauty industry appears to be resilient in the face of economic uncertainty, driven by trends, innovation, and a focus on self-care. The return of the lipstick index phenomenon, the growth in prestige beauty sales, and the influence of social platforms on consumer behavior all indicate a positive outlook for the industry. Meanwhile, regulatory scrutiny in the AI sector highlights the importance of ensuring competition and preventing monopolistic behavior among major players in the industry.
