Taylor Swift and ‘the Lipstick Effect’ on full display
The recent frenzy over Taylor Swift tickets wasn't a sign of cash-strapped Aussies shaking off their economic woes, but of something called 'the Lipstick Effect', WRD creative director Debbie O’Connor writes.
In a recent Financial Review article, chief economist Cherelle Murphy comments that Australia is ‘not an economy on its knees’ due to the fact that expensive Taylor Swift tickets sell out in a day. The article implied that consumers clearly still have money to spend.
What Ms Murphy doesn’t consider, is that perhaps this isn’t a case of a buoyant economy but rather the power of branding.
Tay Tay has built up a cult following for her real and honest storytelling music about love, loss and empowerment that her fans can relate to.
So, when she announced that she is heading Down Under for a limited number of performances, the frenzy that ensued from her Swifties, regardless of the ticket price, was a tribute to her brand and not a state of the economy.
Known as the Lipstick Effect, this phenomenon was first coined by Leonard Lauder – a former Estee Lauder chairman – who noted an increase in the sales of lipstick during the recession after the Dot-com bubble burst in the late 1990s. The theory is that during times of economic hardship, consumers scrimp and save on their groceries and utility bills, however, they will justify luxury items to make them feel good. The brands that resonate and connect with their customers are the ones that are able to leverage and benefit from the lipstick effect.
We see this same brand infatuation with the likes of Apple, Nike and Lego.
Due to e-commerce platforms, the days of lining up in front of an Apple store may have become legend of the past, yet the brand still stands strong amongst its competitors.
The proof is in the pudding when your teenager askes for a new phone. Nothing but an iPhone will do! Why is this? All smart phones do the same thing. In fact, even as an Apple tragic myself, I will go a step further and suggest that an iPhone works no better than a Samsung Galaxy phone. I still can’t convince my teenagers that they don’t need an iPhone.
Growing up in Apartheid South Africa meant that we didn’t have brands such as Nike, McDonalds or Pepsi due to sanctions placed on the country.
Sanctions were finally lifted in 1994, after which Nike entered the South African market. It is an astounding accomplishment that Nike has retained the number one ranking for the fifth consecutive year as the most popular brand in Africa. This is mainly due to the fact that Nike shoes are seen as a status symbol. It is not uncommon to find residents from the townships and poorer economic area’s strutting Nike sportswear, even if they cannot pay their bills.
Anyone with a child or a love of Lego will quickly tell you that these little blocks of plastic come at a pretty penny. You will be hard fetched to find Western homes without at least one box of Lego. Yes, there are imitation items in the marketplace, however when it comes to a birthday or Christmas present, only the real thing will do – regardless of the price tag.
Consumers who love, trust and feel that a brand will reflect well on them or their status in the community will justify the funds to purchase a product regardless of the economic turmoil ensuing around them.
While consumers may think twice about buying that extra cup of coffee or going out for dinner, brands that offer customers the dopamine hit that will make them feel good during difficult financial times, can take advantage of the lipstick effect.
Debbie O’Connor is the creative director of WRD.
