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Never sure whether the lippy effect actually exists

There’s an idea out there called “The Lippy Effect”. Which is that when times are hard folk will give up on those now out of reach luxuries and will substitute down to something that’s just a small luxury. This can be large enough – sorta Jevons Paradox effect even if not really – that sales of the small luxury can rise in those hard times.

The intuition coming from the idea that women who can’t have the new outfit, the full cut and hair pamper, might go for a wash and blow dry, or perhaps a new lipstick just to pamper in the manner that can be afforded.

Elsewhere I’ve wondered whether this might be true of booze as well when talking about Diageo:

There’s also something called “The Lippy Effect” which is derived, of all things, from female behaviour in recessions. This is that often enough lipstick sales actually go up as those of fashion, handbags and so on go down. The observation being that we all desire a little luxury, a little pampering, and if we can’t have it on big and major things then we’ll take a little bit of it by buying smaller yet premium items. It’s easy enough to see how this could happen with spirits. That luxury of better whisky for a few pounds more when the tens or hundreds of pounds to spend aren’t available. As long as things don’t get so bad we’re all back to bathtub gin of course.

The thing I’m not really sure about is the Lippy Effect itself. Sure, I’ve heard it said but I’ve a vague memory of seeing someone scouring the figures and showing that it doesn’t actually happen.

As to booze it’s possible. If the pub is out of reach financially then might we upgrade the home consumption? Dunno to be honest….

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17 thoughts on “Never sure whether the lippy effect actually exists”

  1. Sales of good wines rose during the crash of 2008. “Can’t afford dinner out, suppose I get a really good wine for a night in?”
    No idea about lippy, I never see it as an improvement.

  2. I never wear lipstick and neither does my wife.

    Tbh I’ve always thought it repellent rather than alluring. Why would I want to kiss someone who painted their mouth the colour of a baboon’s arsehole? The Joker is not a sexy look, ladies.

    It’s one of those weird, inexplicable things women do sometimes, like buying air freshener or demanding new curtains even tho there’s nothing wrong with the old ones.

  3. For Diageo I’d be more worried that two years’ worth of 18 & 19 year olds haven’t developed a taste for going out to pubs & clubs. Between Tinder and the Metaverse, they might never take up drinking in a big way.

    Even before Covid struck, the young were drinking considerably less than previous generations. There’s still plenty of mileage left in older drinkers (the 90s lad culture kids can now afford top-shelf spirits), but long-term prospects aren’t great.

  4. Bloke in the Fourth Reich

    OK, clothes vs lippy, retail sales substituting for restaurants, but how many people in the £200 bottle of scotch class ever get to experience downward mobility?

    Malt distilleries go in and out of production all the time, but the single malt market is dominated by a handful – about a dozen – distilleries. Interestingly loads of new distilleries have been built in the last ~10 years.

    Most distilleries do release single malts but end up selling no more than a few bottles a year to the oddball market.* Most of it goes into blends. While they need to gauge demand a decade or more out for the single malts, there is actually huge flexibility in blending. The ratio of final product as malt vs blend can be adjusted at little notice, if demand goes up younger whiskies can be pulled into blends, whereas younger than ~7 years is not practicably marketable as a malt (there is an only partly justifiable age fetish with malts), and blends can be cut with substantial quantities of grain whisky. On the supermarket bottom shelf, bad or under-strength batches of malt can be essentially mixed with vodka and sold as cheap blended whisky where consumers have absolutely no expectation of getting a similar product batch to batch. The more premium blends do have to worry about getting consistent product. Ironically the expensive malts do not, and some (e.g. Balvenie) make a point of “single cask” releases which can taste wildly different, on the same label.

    *One of my claims to fame is having had malt from every Scottish distillery that was still open in 1982.

  5. Isn’t this the same as hem lines? I forget how that was actually supposed to work – shorter skirts means recession on the way, or was it longer? But I’m fairly sure-ish that someone looked at the theory, and discovered it was rubbish.

  6. For a couple, £100 doesn’t go very far for dinner and drinks out. But you can do a very nice supper at home with a bottle of fizz and a bottle of red for £70. I also suspect that, if times do get tough, the ‘lippy’ of F&B might be going out for a couple of cocktails and then heading home.

    @Steve – I’m not a fan of make up on da laydeez; not sure any of them need it under 40. The Love Island types to be seen in the Daily Mail all seem to trowel it on and all pick the same bizarre shade of fake tan, one that resembles no actual human skin colour.

    @Bloke in the Fourth Reich – the single malt market is absolutely booming; that is why all those new distilleries are being launched. And why distilleries are finding new ways of marketing very young single malts; all the big distilleries have ‘No Age Statement’ releases. It’s partially the Asian market, there must be at least a dozen specialist whisky bars here in Hong Kong, not counting hotel bars, while Singapore and all the major cities in Japan have plenty too. But also, more people are investing in whisky. Be interesting to see how that holds up in a rocky economy…

  7. “ One of my claims to fame is having had malt from every Scottish distillery that was still open in 1982.”
    At the same time? Good work.

  8. There’s a modifier here at least for the mentioned examples.
    A restaurant visit is public (at least where you can eat in, not universal right now), while a bottle of good booze can be consumed at home.
    The full outfit etc. sort of requires public parading, while lipstick can be visible over Zoom to your cow-orkers.

    I think we’re moving towards the situation in low-trust societies where your consumption is not visible – behind gates and walls, only visible to people of the “right” class, etc.

  9. During my early 20s I worked in the outdoor pursuits business, taking parties of school kids living in the Scottish Highlands on trekking expeditions, canoeing, sailing, skiing, etc. You often found yourself drinking with distillery workers and there were many visits to their place of employment. I became hooked. Unfortunately I’m not a Diageo man, over the years I have stuck with Speyside as my mainstay, but am also partial to Highland Park. Given that 2021 was a landmark birthday year, and Mrs G. was kind enough to offer, rather than travelling (Covid restrictions) I elected to indulge myself. Have had a lot of fun working my way through countless bottles – from the £250 mark through to £750. After that it becomes silly, something for serious collectors and Asian investors, as opposed to drinkers.

  10. I guess Tim’s point is that, if you were buying this quality of hooch in an upmarket bar or restaurant, a single ‘large one, bartender’ would be an eyewatering sum.

  11. Given you can pay for most of the cost of a meal to be delivered for the price of movie tickets for two I wonder how many people will choose to stay in and stream a movie instead

  12. MC,

    “For a couple, £100 doesn’t go very far for dinner and drinks out. But you can do a very nice supper at home with a bottle of fizz and a bottle of red for £70. I also suspect that, if times do get tough, the ‘lippy’ of F&B might be going out for a couple of cocktails and then heading home.”

    I don’t understand this thing of couples and families, living together, regularly going out for basic stuff like pizza, burgers and steak. You own a cooker. You own a table. Grilled sirloin is not a technically difficult or time consuming dish to prepare. Most of the rest of it is brought in by trucks, so the ice cream is no better than Ben and Jerry’s. By the time you’ve driven to Beefeater, you could have cooked it.

  13. I think if I want a decent steak, I’m going to have to do that BoM4. The ones at my local pub are piddling little things.

  14. BniC,

    “Given you can pay for most of the cost of a meal to be delivered for the price of movie tickets for two I wonder how many people will choose to stay in and stream a movie instead”

    Not many. You can already stream a movie for £4 or less, but people go to the cinema. The reason is partly about the better visuals and sound, but it’s a social place for people who don’t live together. 3 or 4 teenage lads go and have fun watching Vin Diesel in a Fast and Furious movie together.

    The people who like 18th century movies with Judi Dench have been avoiding cinemas for decades and waiting for it to come to DVD or streaming. All these people who bitch about cinemas being all superhero movies don’t even go when they put on a Paul Thomas Anderson film at the local multiplex.

  15. @BoM4:

    Better visuals maybe, but better sound? Things must have changed in the twenty years or so since I went to the cinema. Think I walked out of the last two films I attended because the sound was painfully bad: too loud at the peaks, too distorted at all times, speech unintelligible.

    My TV was and is a whole lot better, because it’s plugged into a proper hi-fi. Sadly, there’s nothing on it I want to watch. It’s only there for the boss.

    Seem to be going slowly deaf now, so it’s not going to bother me any more.

  16. A bipartisan observer

    Well interestingly (or not) in a previous life I worked for a cosmetics manufacturer (yes, ding dong, that one) and it did seem that our sales lifted a little when times were bad in general. Whether that was because the people selling the product were more incentivised to make sales or whether it was the Lippy effect referred to, there was certainly a correlation, if not a massive one.

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