An online survey representing a cross-sectional sample of SA society (i.e. my Facebook friends) revealed that wine, sushi, chocolate and coffee are their favourite ‘affordable luxury’ spoils. Francois Engelbrecht maintains that his cappuccino on the way to work keeps him sane. Ursula Mmushi says when she wants a small splurge, she gets her hair done, while Sisanda Dlakavu admits that perfume is her one weakness. ‘I like to smell nice,’ she says.
Clearly the so-called ‘lipstick indicator’, a phrase coined by Leonard Lauder, ex-chairman of Estee Lauder, is not only a theory, but an economic reality. ‘When an economy enters troubled waters, this does not spell bad news for all categories,’ says Audre Biciunaite of Euromonitor International. ‘Affordable luxury, for example, tends to perform well in a recessionary environment.’
Lipstick sales did brilliantly in the 1999/2000 worldwide recession and then dropped when economies later recovered. When the next recession hit in 2008, it wasn’t lipstick that performed well, though – it was nail varnish, although the same phenomenon was at work. As Lauder himself told TIME magazine, ‘We have long observed the concept of small luxuries, things that can get you through hard times… The biggest surge in movie attendance came during the 1930s during the Depression.’
SA economy in the doldrums
Given the current depressed conditions, consumers are more aware of what they’re spending their money on. ‘Everything from new car sales figures to the financial results of major retailers like Woolworths and Pick n Pay have all reported declines,’ states Robert Grace, head of strategy at M&C Saatchi Abel.
The average shopper’s frugality can be seen in the rise in house-brand product sales, with a recent Nielsen report showing that no-name brands now account for R10 out of every R50 spent at supermarket tills. Given that SA is ranked by Bloomberg as the second most stressed country in the world behind Nigeria, it’s understandable that consumers need a pick-me-up. ‘Brands that provide that instant feel-good factor or deliver an escape from the reality of crime and politics are doing well – and consumers are prepared to pay for the benefit,’ says Grace.
Colour me beautiful
A new dress or pair of shoes may not be on the cards for cash-strapped female consumers, but beauty products are. ‘Sales in cosmetics and accessories have been fairly flat over the past two years,’ says Sally Rothman, director of the GfK Consumer Panel. ‘However, the lipstick market is reaching more South Africans and showing continued growth.’
This is backed up by other beauty experts. ‘In South Africa, the prestige makeup category is showing retail growth of 10%, making it an attractive category,’ says Loren Dryer, general manager at Estee Lauder.
According to M.A.C., lipstick sales are booming. ‘Lips are definitely in, with current trends including gloss, ombre, nude, glitter, stained, matte and metallic,’ says M.A.C. senior artist Raine Tauber.
DIY, men’s grooming and beer
But it’s not only women who like to spoil themselves when times are grim – men do, too. ‘While the rest of the home-improvement market has seen a decrease in units sold, sealants and adhesives have continuously seen growth over the past couple of years,’ asserts Rothman. ‘There are probably multiple reasons behind this, but you can’t look past the fact that a bucket of paint costs around R310, with adhesives and sealants only costing R70 and R40 respectively.’
What else are men splurging on? Beer, it seems – especially good beer. ‘Premium beer is doing really well, even though mainstream beer isn’t,’ says an account director at a market research firm. ‘This is because people who used to have a repertoire spread across expensive categories, such as whisky and beer, are scaling down to beer as a cheaper option, but then premiumise within beer to give them the reward that they’re seeking.’ In other words, you may not be able to afford Johnnie Walker Black, but a Heineken or craft beer will do just as well, while still giving you something to brag about to your mates.
As far as male grooming goes, sales here are also trending up. ‘We have a wide range of male customers with varying needs, from a full “face beat” to a touch of concealer or neatened brows,’ says Tauber. ‘The biggest trends we’re seeing at the moment are skincare and beard care, with men favouring brow and essential oil products.’
Whatever your spoil of choice, there’s no denying the veracity of the lipstick indicator, as my Facebook survey revealed. One friend confided, ‘Even though my husband isn’t earning as much as he used to, we still eat butter. I can’t bring myself to buy margarine!’ Enough said.
This article originally appeared in the December 2017 issue of khuluma, kulula.com’s in-flight magazine.