The Lipstick Index Is Cracking
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For years, beauty was the industry that was deemed “recession-proof”, emotionally resonant, and always ahead of the curve. But this quarter’s results suggest the shine may be starting to dull.
From L’Oréal’s modest 3.5% growth, Estée Lauder cutting of another 7,000 employee’s, to Coty’s profit warning and 700 job cuts, the market is shifting. Even Shiseido and Sephora-parent LVMH are feeling the pinch. This isn’t a blip — it’s a recalibration.
Beauty’s Safety Blanket is Being Rewritten
The “lipstick index” — the idea that consumers buy small luxuries when they can’t afford big ones — once felt like an unshakeable truth. Post-pandemic, it played out again: skincare surged, funding flooded in, and brands rode the wave of self-care culture.
But it appears that in 2025, consumers are behaving differently. There’s a sense of restraint — we’re seeing selectivity.
People are rethinking what matters, and beauty is no longer a guaranteed winner.
Value is the New Status
Consumers haven’t stopped shopping — but they’ve definitely started thinking harder.
We’re seeing a rise in “recession blonde” at salons — lower-maintenance, lower-cost, and entirely aligned with the moment. A £100 perfume that sells for half this on Amazon is no longer just a deal; it’s being savvy.
Platforms like TikTok Shop and off-price retailers are turning traditional distribution models on their head. According to the article from The Business of Fashion - Even higher earners are shifting: over a third of women earning £100k+ have bought beauty from discount channels in the last 30 days.
It’s not just about price — it’s about perception. Value is cool. Smart brands are embracing that.
Oversaturation is Causing Fatigue
The same forces that fuelled the boom — indie brand explosions, viral hauls, TikTok everything — are now causing friction.
Consumers are overwhelmed. The rise of the #underconsumption trend is telling: Gen Z, once the engine of beauty maximalism, is hitting pause. Stripped-back routines are back in fashion, not because they’re minimalist — but because they’re manageable.
And in a noisy digital landscape, beauty brands aren’t just competing with each other. They’re competing with headlines, algorithms, and a culture with an ever-shorter attention span.
Even the most agile players are feeling the pinch. When E.L.F saw engagement dip during talk of a TikTok ban, it became clear: cultural noise is now a serious business risk.
What’s Next?
Beauty’s emotional pull hasn’t disappeared. But its dominance isn’t automatic anymore - brands have to work harder, smarter and more strategically than ever before; brands need more than strong claims and sleek packaging. They need cultural intelligence. Commercial clarity. A product story that genuinely earns its place in a consumer’s life — and a channel strategy that flexes with how people actually shop.
This isn’t a crisis. It’s a challenge to evolve.
At The Matter Collective, we help brands do just that — aligning creativity, commerce, and culture to build relevance that lasts. Because real value isn’t about going cheaper — it’s about going deeper.