'Lipstick effect' keeps beauty market's rebound alive

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Americans are turning to cosmetics and fragrances to beat the inflation blues in a trend called 'the lipstick effect' that could keep the beauty market's post-pandemic rebound alive.

Americans are turning to cosmetics and fragrances to beat the inflation blues in a trend called"the lipstick effect" that could keep the beauty market's post-pandemic rebound alive and help quarterly sales for Estee Lauder and Coty.

"The broader idea is that consumers will invest in small luxuries that increase their confidence and perceived attractiveness during periods of uncertainty," said Jennie Liu, lecturer and executive director at the Yale Center for Customer Insights. Morningstar Research analyst Rebecca Scheuneman said she expects higher-end makeup and fragrances to be particularly resilient as higher-income clients remain mostly immune to inflation.

 

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