Pucker Up Marketers, Recession Means It's Time to Find Your Lipstick Moment

Lipstick sales famously go up in recession. Can’t afford extravagant treats? Downsize to little treats and buy lipstick. This is great if you sell lipstick, but what if you’re the brand being downsized? You might be looking at declining sales, but that’s not the whole story. The lipstick effect goes both ways - one woman’s extravagance is another woman’s lipstick. While the overarching trend may be depressingly down, there will be pockets of ‘new entrant’ opportunities to provide some marginal relief from the recessionary pain.

So how can you find the new customers who see the ‘lipstick’ in you? Here are four tactical opportunities to explore how to be the lipstick your customer wants to see in the world. And a fifth idea on pushing back at the lipstick-isation of your category.

1. Find the direct competitor to whom you are ‘the lipstick’

Unless you’re at the pinnacle of price in your category, you have a more expensive competitor to target. But price is the obvious battleground, everyone goes there in a recession. Positioning as ‘cheaper’ is easily lost in a promotional shouting match, comes with a whiff of panic and alongside everyone else, contributes to a dispiriting feel of economic decline. Aldi came of age in the last downturn with a richer, more confident take on price. ‘Like brands, only cheaper’ wasn’t just about surprising news on price, but quality as well. And, just as important, it was a message told with a confident humour. This made the customer feel smarter rather than simply ‘less poor’ with Aldi, lifting the brand out of the trenches of the prevailing price war.

Find that more expensive competitor and target their customers…

…but make the switch and feel a conscious positive ‘good’ rather than a necessary recessionary ‘evil’.

2. Ladder up to find a new category in which you are ‘lipstick’ 

Cinemark Holdings - one of the world’s biggest cinema companies - announced June ‘22 was their best month since the pandemic. But why? They aren’t particularly lipstick-y in the cinema category. Ladder up and you see they are also in the ‘nights out’ category. Here, they’re definitely a ‘lipstick’ when compared to bars and restaurants. But ladder up further and you get to ‘escapism’. In a world where travel is expensive, cinema is an effective way to transport yourself out of the daily grind and to a better place and was cited as a contributor to their success. 

Ladder up to find new categories in which you can be ‘the lipstick’…

…but then think about what this new context means for who you target, the value you offer and when you are most relevant - ‘escapist’ cinema is different to ‘nights out’ cinema which is different to ‘value’ cinema.

3. Be your own lipstick 

Netflix’s long run of stellar growth came to an abrupt end this year. It lost almost a million subscribers between April ‘22 and July ‘22 as the cost of living crisis led people to cut back. Netflix’s response is to launch a lower cost subscription tier that includes ads. Netflix is looking to maintain a ‘quality’ overall brand experience by limiting the number of ads and the frequency with which you can see the same one. It will also meaningfully distinguish value compared to existing tiers by also reducing the content available and preventing downloads. With this new tier Netflix is effectively looking to ‘lipstick’ itself.

Provide a cheaper option to catch customers downsizing from you…

…but ensure it doesn’t devalue your brand nor cannibalise your premium tiers.

4. Find a new ‘lipstick’ moment 

Sainsbury’s sales are reportedly down 2.4% Year on Year in ‘22, but Sainsbury’s ‘Taste The Difference’ range was up 12% over Jubilee Weekend. ‘Nice food to eat at home’ is the classic lipstick in the face of the higher cost of ‘going out’. But are there new moments when this trade off feels particularly compelling? Finding them requires recognising the category you are ‘lipsticking’ and looking for relevant events that can bring your benefit into sharp relief.

Find new moments where you can ‘lipstick’ a category…

…but then think about what this means for target, message and tone of voice. For example “treating yourself to a Friday night in” is different conversation to ‘celebrate a jubilee'

5. Reframe ‘purchase’ to ‘investment’ to push back at ‘lipstick’ products

In early 2008 De Beers reduced its US marketing, assuming the recession would mean fewer people buying diamonds. But research changed their minds. Diamonds stand out in their category as ‘enduring value’. While a diamond could never be a cheap purchase, it could be a discerning investment. As a result, they increased their spend with a campaign promoting ‘Here’s to less’ and urging people to buy ‘fewer, better things’ because ‘a diamond is forever’. US sales did soften, but prices were stable and people’s desire for diamonds remained as strong as ever.

In a cost of living crisis, people are price sensitive and ‘lipsticks’ products are competitive…

…but if you can redefine category value in a way that makes sense in a recession, you can protect yourself from some short-term ‘lipstick’ competition and preserve your long-term brand value to position you for the upturn.