May 23, 2025 • 15 mins
In 2001, it was lipstick. After the 2008 financial crisis, it was DIY haircuts. In times of economic turmoil, consumers tend to change the way they spend on makeup and beauty. So what is the beauty industry telling us now about the state of the US economy?
On today’s Big Take podcast, Bloomberg’s Ben Steverman visits a beauty convention and talks to masseuses and hair stylists about the trends they’re seeing in their salons, and cosmetics reporter Jeannette Neumann crunches the numbers on how these consumer behaviors are hitting companies’ bottom lines.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
If you're looking for a gut check on the health
of the US economy, you could call up an economist,
or you could ask a hairdresser.
Speaker 3 (00:17):
Do you feel like the economy is good right now?
Speaker 4 (00:20):
I'm nervous, honestly, I'm nervous for what's going to happen
in the industry specifically.
Speaker 2 (00:24):
That's Sydney Jackson Green. She's a cosmetology student who works
at a salon in Springfield, Pennsylvania. She met her colleague
Ben Steverman at a beauty industry trade show in New
York earlier this spring and told him that recently business
has been slowing down.
Speaker 4 (00:40):
You know, I'm very young, and a lot of my
clients Sele is young as well, so some of these
outrageous prices is effecting business.
Speaker 3 (00:48):
She does a lot of braiding and the supplies you
need for braiding hair. The prices have gone up significantly.
Speaker 4 (00:54):
Braiding hair has gone up probably at least like three
dollars since I started doing hair. Now, if you need
four or five packs for your hair now, it just
went up twelve to twenty dollars depending on how much
air you.
Speaker 3 (01:08):
Ad Also, hair coloring, hair dye, those have gone up.
Speaker 4 (01:11):
People still want their hair done, but now people are
learning how to do it at home. I've had a
bunch of at home disasters.
Speaker 3 (01:18):
Her clients will call her because they've done something at home,
like they've dyed their own hair and it just looks terrible,
So then she has to fix it.
Speaker 4 (01:25):
When it comes down to shampoo's conditioners, they're also increasing
their pricing. So now when our client needs a deep conditioner,
she's like, hey, can I get it next time? But
that's your hair needs it this time.
Speaker 2 (01:39):
To Ben Sydney's story felt eerily familiar. People trying to
save money by skipping trips to the salon experimenting with
DIY styles. If that brings up memories of the COVID
nineteen pandemic, think back even further to the aftermath of
the two thousand and eight financial crisis.
Speaker 3 (01:58):
There was a hairstyle momana called recession hair. Supposedly, there's
a trend of people getting lower maintenance cuts in the
financial crisis.
Speaker 2 (02:08):
Official economic data can be slow to reflect the actual
state of the economy, and though Trump's tariff policies and
the reaction to them have stoked fears of another coming recession.
So far, key economic indicators are stable. The stock market
has mostly rebounded from its dive of last month, unemployment
hasn't gone up, and an April inflation rose by less
(02:30):
than forecasted. The strongest warnings have appeared in data that
reflect how consumers and companies are feeling about the economy.
A University of Michigan survey with data going back to
the seventies found that in May, US consumer sentiment hit
its second lowest level on record. Last week, Walmart warned
(02:50):
it might soon have to raise prices, and this week,
when Target released its first quarter earnings, it revealed sales
have been slowing. In times like these, people hung for
more real time color can get creative and turned to
unofficial sources of economic data too. Like beauty industry trends.
Speaker 3 (03:09):
The first thing you cut down on in a slowdown
might be that facial or that massage.
Speaker 2 (03:17):
Or that haircut. Today on the show, what beauty spending
can tell us about the health of the US economy
and what shifts in behavior at home and at the
salon are signaling about where it's headed next. This is
the big take from Bloomberg News. I'm Sarah Holder. Back
(03:41):
in March, Ben Steverman went to a beauty show and
cosmetics conference where he hoped to check the pulse of
the US economy. Thirty two thousand spa technicians, hairstylists, colorists,
and makeup artists were there too.
Speaker 3 (03:54):
It was two giant rooms connected by a tunnel, and
on one side with all the spa stuff, and on
the other side was all the hair stuff. And you
would go buy these boots, and some of them were
quite elaborate. They would have demonstrations going on where where
they're putting goop on people's faces or they're cutting hair
as a demonstration. It was one hundreds thousands of different
(04:16):
products being sold and it was fun.
Speaker 2 (04:20):
What kind of mood were you picking up there? Was
it jubilant? Was it anxious?
Speaker 3 (04:24):
It wasn't that they were in a bad mood. It
was only when I asked them about how's business that
they told me things that were a little troubling.
Speaker 2 (04:31):
Ben met a woman who does eyelash extensions and hair
coloring in Brewer, Maine.
Speaker 4 (04:36):
I used to have a lot of like bleaching tones,
whereas now they're kind of going for that lived in
moment so they can go longer between our appointments.
Speaker 2 (04:42):
The more natural the hair color, the less obvious it
is if you haven't had your hair dyed in a while.
Ben also talked to an executive at a New Jersey
based skincare company that's recently launched mini versions of its products.
Speaker 3 (04:55):
The price point was better, So I think having that
as an option for people, they can still be entered
into our product line without having to spend xt amounts
of money.
Speaker 2 (05:02):
So and he met a massage therapist in Northern Virginia
with a lot of federal government workers as clients.
Speaker 4 (05:09):
It's feeling on like two thousand and eight with the
market crash and everybody not knowing what to do, and
so they don't want to spend that access money.
Speaker 3 (05:17):
I was hearing this from Okay, here's this person in Manhattan,
and here's this person in rural New Hampshire, and they're
saying the same thing. That was really interesting. The people
who'd been doing this for decades, they were the ones
who said, this feels like other slowdowns I've been through
in my career, and I'm worried.
Speaker 2 (05:37):
In spas and salons across America, beauty professionals are noticing
clients cutting back and shifting their spending in the age
of teriff related uncertainty, and beauty companies are noticing too.
Speaker 1 (05:50):
There's some indication that the major cosmetics companies expect at
least a little bit of a slowdown in the coming year.
Speaker 2 (05:59):
That's Newman, a reporter on Bloomberg's Consumer team. She writes
about the beauty and cosmetics industry, an industry that's experienced
a massive surge and growth worldwide in recent years. Between
twenty twenty one and twenty twenty three, industry analysts estimate
that the global beauty market grew by up to eight percent,
but that trajectory could be changing.
Speaker 1 (06:21):
The CEO of Looreal so one of the biggest beauty
companies in the world, he said last month, so in April,
that expects the beauty category to grow globally like four
to four point five percent, and that was on the
slightly lower end of what they had been expecting. I mean,
this is not just lorel this is globally, So that
just gives you a sense, like four to four point
(06:43):
five percent, it's still really really good.
Speaker 2 (06:45):
Growth, but it's a slowdown in that growth exactly.
Speaker 1 (06:47):
It's a slow down in that growth.
Speaker 2 (06:49):
The Lorel CEO said that this year his growth prediction
was on the lower end because of a slower than
expected American market, and he said it didn't even account
for how quote inter national turmoil and tariff wars could
make things worse. Even though Trump has pumped the brakes
on some of his most aggressive tariffs on China for now,
reciprocal tariffs are still set to take effect in July,
(07:12):
and there's concern those levees could make everything from manufacturing
to packaging more expensive, driving up prices across the beauty
market and pushing customers to be more selective.
Speaker 1 (07:24):
What they're really more worried about is that consumers seeing
all of this talk of tariffs, concerns about higher prices,
concerns about a potential recession in the US, will pull
back on their spending.
Speaker 2 (07:36):
Over the past few years, highly involved multi step multi products,
skincare and makeup routines have been on the rise. It
all started during the pandemic, when people were stuck at
home with time on their hands, sharing beauty tips on
TikTok How I do my barely there glowy MAKEOVERROUTEAE. This
is quite twenty nine years and you just pack it
into your skin.
Speaker 3 (07:56):
Now most people use one prima I use.
Speaker 2 (07:59):
Three, but Jeannett says there are signs that trend could
be moderating.
Speaker 1 (08:04):
So, for example, setting sprays have been declining in the
past couple months, and some of the analysts I spoke
with think that that is in part because people are
starting to kind of cut some of these steps out
of their of their routines.
Speaker 2 (08:17):
Certain products could be more vulnerable to getting cut than others.
Speaker 1 (08:21):
There's some incipient signs that we're seeing that people can
prioritize their spending on kind of better and fewer products.
Loloreal reported their earnings recently and their higher end offering
actually did really well, better than their mass market products.
And that can also be like I'm cutting back on,
you know, step twelve or eleven of my beauty routine,
(08:42):
or i could be cutting back several steps and I
decide that I'm actually going to buy that really expensive
lotion because I think that it, you know, works better,
it's worth it. I'm going to focus on that and
put my money towards that. So I'm buying a more
expensive lotion because I'm not buying the setting spray. I'm
not buying three or four different serums.
Speaker 2 (09:00):
And while some people are choosing to invest more in
the products they do keep buying, others are willing to downgrade.
According to data from a beauty industry research group called
h Intelligence.
Speaker 1 (09:11):
What we've been seeing recently is that kind of less
expensive versions of fragrance are becoming more popular, and this
is potentially in reaction to just consumers saying, hey, I'm
worried about potential recession, higher prices, I'm going to watch
my wallet. So things like roller balls, which are cheaper
versions of fragrance dupes, have continued to go from strength
(09:32):
to strength.
Speaker 2 (09:35):
So it could be mid tier products that suffer the
most as people continue to buy the higher end stuff
and cheaper dupes or knockoffs. This is something Ben realized
at the trade show too, that even in hard times,
it's unusual for people to stop moisturizing entirely or go
gray instead. Big beauty brands and solo stylists alike are
(09:57):
noticing consumers making shifts, spacing out their appointments, buying smaller bottles,
and finding less expensive alternatives after the break who the
beneficiaries of these beauty industry shifts could.
Speaker 1 (10:11):
Be beauty is discretionary, but I think to a lot
of us it feels a little bit less discretionary than
some of these other categories.
Speaker 2 (10:24):
That's Janette Newman again.
Speaker 1 (10:25):
We're talking about discretionary spending, meaning things that you don't
have to buy, but the lotion that you might use
every night feels a little bit more like a have
to buy than a piece of a skirt or a
T shirt. So that's one reason that it's actually quite
a resilient category in times of downturn.
Speaker 2 (10:42):
So beauty spending is discretionary, especially when it comes to
services like massages and spa treatments, but it's also resilient
to economic shocks, and some products and services are more
resilient than others. Ben Steveerman says it's a dynamic that
showed up in paws downturns during the post nine to
eleven recession. Leonard Lauder Than, the chairman of the board
(11:05):
of Estay. Lauder famously shared that lipstick sales had spiked.
People kept buying cosmetics through the Great Recession too. Journalists
and economists have a name for the phenomenon. They call
it the lipstick effect.
Speaker 3 (11:19):
The idea is that there are certain luxuries that people
stick with because it makes them happy and it's something
that is a relatively inexpensive way to have something that
gives you some pleasure. Just because we're in a slow
down doesn't mean everything slows down.
Speaker 2 (11:35):
Lipstick wasn't exactly a COVID era winner, remember all the masks,
but the pandemic's economic disruptions made people invest in other
small self care luxuries like skincare, and now in our
current era of economic uncertainty, Janette says, data from Dash
Intelligence shows that a different set of beauty products are
having their own sort of lipstick effect, seeing their sales
(11:58):
increase as other slow down at home salon replacements.
Speaker 1 (12:03):
Artificial nail sales are up about thirteen percent in March
versus February, and the growth has also been incredibly strong
year over year, and we're also seeing strong increases in
sales of color and bleach. So some signs that people
are doing some of these things at home rather than
going to salons with the same frequency.
Speaker 2 (12:26):
And some of the people who've continued going to the
salon are choosing lower maintenance treatments. Industry analysts say when
it comes to hair dye, for instance, they're expecting to
see more natural roots, warmer hues, and fewer blondes.
Speaker 1 (12:40):
There's a term called procession blonde, which I think is
maybe a TikTok term that people can kind of shift
the coloring of their hair to make it easier to
take care of. So if your roots start to come in,
you don't have to go to the salon within like
a week. You could wait a little bit longer, and
so that keeps your costs down. And these are different
theory that are kind of I think fun to debate.
(13:02):
Are these economic trends or just beauty trends?
Speaker 3 (13:05):
Right?
Speaker 1 (13:05):
Beauty trends kind of come and go. Are some of
the things that we're seeing because trends are just shifting
or is it that they're pushed kind of by the economy?
Speaker 4 (13:12):
Right?
Speaker 2 (13:13):
The at home nail kits might be cool and trending
on TikTok et cetera, in part because they're a little cheaper.
Exactly exactly, So, does a rise and do it yourself
manicures mean the market's about to crash? Does more at
home bleach mean recession hair is officially back? Well? Ben
and Jinette didn't go that far, but they both said
(13:35):
that in corporate earnings reports, conversations with sources, and cultural trends,
they are seeing recession indicators. And while none of these
consumer behavior shifts alone can predict the US's economic trajectory,
they do offer hints at what parts of the beauty
industry are best positioned to get through a downturn. Like
(13:55):
large multinational companies that operate several different brands, companies like
Lareel and Esta Lauder.
Speaker 1 (14:02):
They have a lot of leverage to work with their
suppliers and for example, on their higher end products to
raise prices.
Speaker 2 (14:09):
It could be tougher for smaller players, like some of
the people been met at the Beauty Convention, those salons
and companies that are less able to quickly rework their
supply chains to deal with new tariffs or adapt their
product offerings or scales of production based on consumer spending.
Speaker 3 (14:25):
This is an industry that has been growing pretty strongly
coming out of COVID, and so you hope that some
of these businesses that started up, and there's hundreds and
thousands of new businesses have started up in this area,
you hope that they can survive it.
Speaker 2 (14:38):
Bloomberg Intelligence has been running a survey of American consumers
over the past few years, and this January, almost half
of the one thousand respondents said they'd cut back on
other purchases before scaling back on beauty and personal care spending.
But that's actually lower than the number of respondents who
prioritize beauty spending in twenty twenty four and twenty twenty three.
(15:00):
In other words, after so many years of pandemic fueled growth,
peak beauty just might be behind us. Resilient but still discretionary.
This is the Big Take from Bloomberg News. I'm Sarah Holder.
This episode was produced by Julia Press. It was edited
by Tracy Samuelson and Tanya Garcia. It was fact checked
(15:23):
by our editorial team and mixed and sound designed by
Alex Sugiura. Special thanks to Lindsay Dutch. Our senior producer
is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our
deputy executive producer is Julia Weaver. Our executive producer is
Nicole Beamster. Bar Sage Bauman is Bloomberg's head of Podcasts.
If you liked this episode, make sure to subscribe and
(15:45):
review The Big Take wherever you listen to podcasts. It
helps people find the show. Thanks for listening. We'll be
back next week.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
If you're looking for a gut check on the health
of the US economy, you could call up an economist,
or you could ask a hairdresser.
Speaker 3 (00:17):
Do you feel like the economy is good right now?
Speaker 4 (00:20):
I'm nervous, honestly, I'm nervous for what's going to happen
in the industry specifically.
Speaker 2 (00:24):
That's Sydney Jackson Green. She's a cosmetology student who works
at a salon in Springfield, Pennsylvania. She met her colleague
Ben Steverman at a beauty industry trade show in New
York earlier this spring and told him that recently business
has been slowing down.
Speaker 4 (00:40):
You know, I'm very young, and a lot of my
clients Sele is young as well, so some of these
outrageous prices is effecting business.
Speaker 3 (00:48):
She does a lot of braiding and the supplies you
need for braiding hair. The prices have gone up significantly.
Speaker 4 (00:54):
Braiding hair has gone up probably at least like three
dollars since I started doing hair. Now, if you need
four or five packs for your hair now, it just
went up twelve to twenty dollars depending on how much
air you.
Speaker 3 (01:08):
Ad Also, hair coloring, hair dye, those have gone up.
Speaker 4 (01:11):
People still want their hair done, but now people are
learning how to do it at home. I've had a
bunch of at home disasters.
Speaker 3 (01:18):
Her clients will call her because they've done something at home,
like they've dyed their own hair and it just looks terrible,
So then she has to fix it.
Speaker 4 (01:25):
When it comes down to shampoo's conditioners, they're also increasing
their pricing. So now when our client needs a deep conditioner,
she's like, hey, can I get it next time? But
that's your hair needs it this time.
Speaker 2 (01:39):
To Ben Sydney's story felt eerily familiar. People trying to
save money by skipping trips to the salon experimenting with
DIY styles. If that brings up memories of the COVID
nineteen pandemic, think back even further to the aftermath of
the two thousand and eight financial crisis.
Speaker 3 (01:58):
There was a hairstyle momana called recession hair. Supposedly, there's
a trend of people getting lower maintenance cuts in the
financial crisis.
Speaker 2 (02:08):
Official economic data can be slow to reflect the actual
state of the economy, and though Trump's tariff policies and
the reaction to them have stoked fears of another coming recession.
So far, key economic indicators are stable. The stock market
has mostly rebounded from its dive of last month, unemployment
hasn't gone up, and an April inflation rose by less
(02:30):
than forecasted. The strongest warnings have appeared in data that
reflect how consumers and companies are feeling about the economy.
A University of Michigan survey with data going back to
the seventies found that in May, US consumer sentiment hit
its second lowest level on record. Last week, Walmart warned
(02:50):
it might soon have to raise prices, and this week,
when Target released its first quarter earnings, it revealed sales
have been slowing. In times like these, people hung for
more real time color can get creative and turned to
unofficial sources of economic data too. Like beauty industry trends.
Speaker 3 (03:09):
The first thing you cut down on in a slowdown
might be that facial or that massage.
Speaker 2 (03:17):
Or that haircut. Today on the show, what beauty spending
can tell us about the health of the US economy
and what shifts in behavior at home and at the
salon are signaling about where it's headed next. This is
the big take from Bloomberg News. I'm Sarah Holder. Back
(03:41):
in March, Ben Steverman went to a beauty show and
cosmetics conference where he hoped to check the pulse of
the US economy. Thirty two thousand spa technicians, hairstylists, colorists,
and makeup artists were there too.
Speaker 3 (03:54):
It was two giant rooms connected by a tunnel, and
on one side with all the spa stuff, and on
the other side was all the hair stuff. And you
would go buy these boots, and some of them were
quite elaborate. They would have demonstrations going on where where
they're putting goop on people's faces or they're cutting hair
as a demonstration. It was one hundreds thousands of different
(04:16):
products being sold and it was fun.
Speaker 2 (04:20):
What kind of mood were you picking up there? Was
it jubilant? Was it anxious?
Speaker 3 (04:24):
It wasn't that they were in a bad mood. It
was only when I asked them about how's business that
they told me things that were a little troubling.
Speaker 2 (04:31):
Ben met a woman who does eyelash extensions and hair
coloring in Brewer, Maine.
Speaker 4 (04:36):
I used to have a lot of like bleaching tones,
whereas now they're kind of going for that lived in
moment so they can go longer between our appointments.
Speaker 2 (04:42):
The more natural the hair color, the less obvious it
is if you haven't had your hair dyed in a while.
Ben also talked to an executive at a New Jersey
based skincare company that's recently launched mini versions of its products.
Speaker 3 (04:55):
The price point was better, So I think having that
as an option for people, they can still be entered
into our product line without having to spend xt amounts
of money.
Speaker 2 (05:02):
So and he met a massage therapist in Northern Virginia
with a lot of federal government workers as clients.
Speaker 4 (05:09):
It's feeling on like two thousand and eight with the
market crash and everybody not knowing what to do, and
so they don't want to spend that access money.
Speaker 3 (05:17):
I was hearing this from Okay, here's this person in Manhattan,
and here's this person in rural New Hampshire, and they're
saying the same thing. That was really interesting. The people
who'd been doing this for decades, they were the ones
who said, this feels like other slowdowns I've been through
in my career, and I'm worried.
Speaker 2 (05:37):
In spas and salons across America, beauty professionals are noticing
clients cutting back and shifting their spending in the age
of teriff related uncertainty, and beauty companies are noticing too.
Speaker 1 (05:50):
There's some indication that the major cosmetics companies expect at
least a little bit of a slowdown in the coming year.
Speaker 2 (05:59):
That's Newman, a reporter on Bloomberg's Consumer team. She writes
about the beauty and cosmetics industry, an industry that's experienced
a massive surge and growth worldwide in recent years. Between
twenty twenty one and twenty twenty three, industry analysts estimate
that the global beauty market grew by up to eight percent,
but that trajectory could be changing.
Speaker 1 (06:21):
The CEO of Looreal so one of the biggest beauty
companies in the world, he said last month, so in April,
that expects the beauty category to grow globally like four
to four point five percent, and that was on the
slightly lower end of what they had been expecting. I mean,
this is not just lorel this is globally, So that
just gives you a sense, like four to four point
(06:43):
five percent, it's still really really good.
Speaker 2 (06:45):
Growth, but it's a slowdown in that growth exactly.
Speaker 1 (06:47):
It's a slow down in that growth.
Speaker 2 (06:49):
The Lorel CEO said that this year his growth prediction
was on the lower end because of a slower than
expected American market, and he said it didn't even account
for how quote inter national turmoil and tariff wars could
make things worse. Even though Trump has pumped the brakes
on some of his most aggressive tariffs on China for now,
reciprocal tariffs are still set to take effect in July,
(07:12):
and there's concern those levees could make everything from manufacturing
to packaging more expensive, driving up prices across the beauty
market and pushing customers to be more selective.
Speaker 1 (07:24):
What they're really more worried about is that consumers seeing
all of this talk of tariffs, concerns about higher prices,
concerns about a potential recession in the US, will pull
back on their spending.
Speaker 2 (07:36):
Over the past few years, highly involved multi step multi products,
skincare and makeup routines have been on the rise. It
all started during the pandemic, when people were stuck at
home with time on their hands, sharing beauty tips on
TikTok How I do my barely there glowy MAKEOVERROUTEAE. This
is quite twenty nine years and you just pack it
into your skin.
Speaker 3 (07:56):
Now most people use one prima I use.
Speaker 2 (07:59):
Three, but Jeannett says there are signs that trend could
be moderating.
Speaker 1 (08:04):
So, for example, setting sprays have been declining in the
past couple months, and some of the analysts I spoke
with think that that is in part because people are
starting to kind of cut some of these steps out
of their of their routines.
Speaker 2 (08:17):
Certain products could be more vulnerable to getting cut than others.
Speaker 1 (08:21):
There's some incipient signs that we're seeing that people can
prioritize their spending on kind of better and fewer products.
Loloreal reported their earnings recently and their higher end offering
actually did really well, better than their mass market products.
And that can also be like I'm cutting back on,
you know, step twelve or eleven of my beauty routine,
(08:42):
or i could be cutting back several steps and I
decide that I'm actually going to buy that really expensive
lotion because I think that it, you know, works better,
it's worth it. I'm going to focus on that and
put my money towards that. So I'm buying a more
expensive lotion because I'm not buying the setting spray. I'm
not buying three or four different serums.
Speaker 2 (09:00):
And while some people are choosing to invest more in
the products they do keep buying, others are willing to downgrade.
According to data from a beauty industry research group called
h Intelligence.
Speaker 1 (09:11):
What we've been seeing recently is that kind of less
expensive versions of fragrance are becoming more popular, and this
is potentially in reaction to just consumers saying, hey, I'm
worried about potential recession, higher prices, I'm going to watch
my wallet. So things like roller balls, which are cheaper
versions of fragrance dupes, have continued to go from strength
(09:32):
to strength.
Speaker 2 (09:35):
So it could be mid tier products that suffer the
most as people continue to buy the higher end stuff
and cheaper dupes or knockoffs. This is something Ben realized
at the trade show too, that even in hard times,
it's unusual for people to stop moisturizing entirely or go
gray instead. Big beauty brands and solo stylists alike are
(09:57):
noticing consumers making shifts, spacing out their appointments, buying smaller bottles,
and finding less expensive alternatives after the break who the
beneficiaries of these beauty industry shifts could.
Speaker 1 (10:11):
Be beauty is discretionary, but I think to a lot
of us it feels a little bit less discretionary than
some of these other categories.
Speaker 2 (10:24):
That's Janette Newman again.
Speaker 1 (10:25):
We're talking about discretionary spending, meaning things that you don't
have to buy, but the lotion that you might use
every night feels a little bit more like a have
to buy than a piece of a skirt or a
T shirt. So that's one reason that it's actually quite
a resilient category in times of downturn.
Speaker 2 (10:42):
So beauty spending is discretionary, especially when it comes to
services like massages and spa treatments, but it's also resilient
to economic shocks, and some products and services are more
resilient than others. Ben Steveerman says it's a dynamic that
showed up in paws downturns during the post nine to
eleven recession. Leonard Lauder Than, the chairman of the board
(11:05):
of Estay. Lauder famously shared that lipstick sales had spiked.
People kept buying cosmetics through the Great Recession too. Journalists
and economists have a name for the phenomenon. They call
it the lipstick effect.
Speaker 3 (11:19):
The idea is that there are certain luxuries that people
stick with because it makes them happy and it's something
that is a relatively inexpensive way to have something that
gives you some pleasure. Just because we're in a slow
down doesn't mean everything slows down.
Speaker 2 (11:35):
Lipstick wasn't exactly a COVID era winner, remember all the masks,
but the pandemic's economic disruptions made people invest in other
small self care luxuries like skincare, and now in our
current era of economic uncertainty, Janette says, data from Dash
Intelligence shows that a different set of beauty products are
having their own sort of lipstick effect, seeing their sales
(11:58):
increase as other slow down at home salon replacements.
Speaker 1 (12:03):
Artificial nail sales are up about thirteen percent in March
versus February, and the growth has also been incredibly strong
year over year, and we're also seeing strong increases in
sales of color and bleach. So some signs that people
are doing some of these things at home rather than
going to salons with the same frequency.
Speaker 2 (12:26):
And some of the people who've continued going to the
salon are choosing lower maintenance treatments. Industry analysts say when
it comes to hair dye, for instance, they're expecting to
see more natural roots, warmer hues, and fewer blondes.
Speaker 1 (12:40):
There's a term called procession blonde, which I think is
maybe a TikTok term that people can kind of shift
the coloring of their hair to make it easier to
take care of. So if your roots start to come in,
you don't have to go to the salon within like
a week. You could wait a little bit longer, and
so that keeps your costs down. And these are different
theory that are kind of I think fun to debate.
(13:02):
Are these economic trends or just beauty trends?
Speaker 3 (13:05):
Right?
Speaker 1 (13:05):
Beauty trends kind of come and go. Are some of
the things that we're seeing because trends are just shifting
or is it that they're pushed kind of by the economy?
Speaker 4 (13:12):
Right?
Speaker 2 (13:13):
The at home nail kits might be cool and trending
on TikTok et cetera, in part because they're a little cheaper.
Exactly exactly, So, does a rise and do it yourself
manicures mean the market's about to crash? Does more at
home bleach mean recession hair is officially back? Well? Ben
and Jinette didn't go that far, but they both said
(13:35):
that in corporate earnings reports, conversations with sources, and cultural trends,
they are seeing recession indicators. And while none of these
consumer behavior shifts alone can predict the US's economic trajectory,
they do offer hints at what parts of the beauty
industry are best positioned to get through a downturn. Like
(13:55):
large multinational companies that operate several different brands, companies like
Lareel and Esta Lauder.
Speaker 1 (14:02):
They have a lot of leverage to work with their
suppliers and for example, on their higher end products to
raise prices.
Speaker 2 (14:09):
It could be tougher for smaller players, like some of
the people been met at the Beauty Convention, those salons
and companies that are less able to quickly rework their
supply chains to deal with new tariffs or adapt their
product offerings or scales of production based on consumer spending.
Speaker 3 (14:25):
This is an industry that has been growing pretty strongly
coming out of COVID, and so you hope that some
of these businesses that started up, and there's hundreds and
thousands of new businesses have started up in this area,
you hope that they can survive it.
Speaker 2 (14:38):
Bloomberg Intelligence has been running a survey of American consumers
over the past few years, and this January, almost half
of the one thousand respondents said they'd cut back on
other purchases before scaling back on beauty and personal care spending.
But that's actually lower than the number of respondents who
prioritize beauty spending in twenty twenty four and twenty twenty three.
(15:00):
In other words, after so many years of pandemic fueled growth,
peak beauty just might be behind us. Resilient but still discretionary.
This is the Big Take from Bloomberg News. I'm Sarah Holder.
This episode was produced by Julia Press. It was edited
by Tracy Samuelson and Tanya Garcia. It was fact checked
(15:23):
by our editorial team and mixed and sound designed by
Alex Sugiura. Special thanks to Lindsay Dutch. Our senior producer
is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our
deputy executive producer is Julia Weaver. Our executive producer is
Nicole Beamster. Bar Sage Bauman is Bloomberg's head of Podcasts.
If you liked this episode, make sure to subscribe and
(15:45):
review The Big Take wherever you listen to podcasts. It
helps people find the show. Thanks for listening. We'll be
back next week.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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