Has The End Of The Lipstick Index Been Greatly Exaggerated?

The lipstick index has been declared over more than baggy jeans—and both have an endurable knack for sticking around.

From Bloomberg to The Business of Fashion, articles have predicted peak beauty is here, consumers are tapped out, and beauty’s recession resilience is a relic. The data tells a more nuanced story. Sure, the beauty industry’s growth is slowing, but it’s not extinct. Management consultancy McKinsey & Co.’s latest beauty industry report with Business of Fashion projected worldwide beauty sales will increase 5% annually through 2030, down from 7% from 2022 to 2024. 

The timing of this debate feels particularly poignant given that Leonard Lauder, the former president, CEO and chair of Estée Lauder Companies Inc. who coined the term, died on Saturday at the age of 92. Even as the beauty industry mourns his passing, discussion about the lipstick index persists. In August last year, Bloomberg Opinion columnist Andrea Felsted wrote that the idea behind the term, characterized by people snapping up relatively affordable beauty products as treats during economic downturns, “may not be so pronounced this time” if there’s a recession.

She suggested consumers had already stuffed their makeup bags and cabinets full of products like lip oils, body creams and perfumes—and they wouldn’t overstuff them if they felt squeezed. She said, “Years of blockbuster growth in the beauty industry means there may be less need to stock up…It’s hard not to think we’ve reached peak beauty.”

In a May article this year on the lipstick index, Business of Fashion senior beauty correspondent Daniela Morosini cited slumping sales at conglomerates like Coty, Estée Lauder and Shiseido, a spending pullback among aspirational middle-class shoppers, and the indie beauty and e-commerce explosion causing consumer fatigue as evidence that it’s been toppled.

Another point favoring the end-of-lipstick-index theory is that sales of lipstick have melted. According to market research firm Circana, prestige lipstick sales declined 15% in the first quarter this year.

However, not all beauty industry insiders believe that the lipstick index is cooked. They argue for a broader view of it, noting that the notion of small indulgences doing well in downturns shouldn’t be limited to lipstick alone and isn’t undermined by a few companies, albeit large ones, with softening sales. Circana SVP and global beauty industry advisor Larissa Jensen highlights that, in the first quarter, sales of prestige lip oils and lip balms were up 18%, and sales of mass lip glosses, lip oils and lip balms were up 14%.

“Part of how the lipstick index was so named was because lipstick was one of a few areas in beauty that posted growth during that generally negative period. Today’s market and consumer are different, and social media plays a significant role in keeping beauty top of mind and creating FOMO,” she says. “This is why I maintain the lipstick effect has evolved to be more about beauty overall, which has weathered consumer sentiment declines over the last several years with strong growth.”

And many insiders contend that it’s wrong to interpret the lipstick index as meaning there will be absolutely no impact on beauty from a recession. Explaining her optimism about the industry to the publication Fashionista, Cristina Nuñez, partner and co-founder at early-stage beauty and wellness investment firm True Beauty Ventures, said, “I don’t think anything’s recession-proof, but I think beauty is probably one of—if not the most—resilient categories within consumer [product investing]. Beauty has this ability to provide little pleasures for people and escape from the realities of their life, so I don’t think people are going to stop these habits.”

Circana hasn’t backed away from its forecast for beauty industry growth. Jensen says, “We are bullish on the continued resiliency of the industry. We expect both mass and prestige beauty will continue to grow in the low single digits, even as that growth slows down over the next few years. And in line with years past, unit demand for prestige should remain stronger than in mass.”

Based on this discussion, for the latest edition of our ongoing No Stupid Questions series, we asked 14 beauty consultants, executives, entrepreneurs and investors the following: Where do you stand on the lipstick index and whether it’s dead or lives on? What’s your prognosis for beauty sales this year and into the future?

Fiona Glen Managing Director, The Red Tree

Objectively, the term lipstick effect was created in a time where beauty buying dynamics were considerably different to today. When Leonard Lauder coined the phrase, the industry behaved in a much more linear manner.

Brands launched far fewer assortments across fewer sales channels, with department stores or drugstores dominating. The path between marketing and purchase was almost as simplistic as, “lady sees beauty ad on the street and heads to store.” In these times, advertising campaigns could make or break a beauty brand.

One of my mentors headed up Revlon’s U.K. marketing team in the ‘90s, and they were the first to advertise cosmetics in out-of-home locations such as subways or buses. At the time, it was met with a resistant reaction of cosmetics being too clean to appear in such dirty locations, yet today it’s commonplace. It’s a fact that I often refer to as it’s a great example of how much our industry has moved on and how much we take for granted these changes.

Compared to that simplistic environment, buying behaviors today are so much muddier with a myriad of consumer touch points. Multiple product launches across so many sales and marketing channels mean that trends can go from zero to hero overnight.

It’s harder than ever to attribute consumer sentiment to sales. Brand success is no longer purely in the hands of the marketing team. Consumers now have the power to make or break a launch with positive or negative reactions to products or campaigns.

Additionally, the pace at which consumers are shopping beauty makes it more impulsive than ever, from a simple click to purchase with Apple Pay on our phones, “when it’s gone it’s gone” lives via social selling, to getting stung in the grab and go section of Sephora. Consumers are buying so quickly they don’t have time to think.

It’s less realistic that the consumer is purchasing that Sacheu lip stain because it makes them feel better about the global economic climate. They’re more likely buying it because they’ve been bombarded with media at multiple touchpoints and are scared of missing out on the deal when they see it either online or in store.

Aside from Sacheu, many other brands that have been innovating within lip recently, Summer Fridays, Gisou, Laneige to name but a few. This category has had more innovation in the last five years than it’s had since the ‘90s so we’re not comparing apples with apples.

So, does the lipstick index exist? In my option, the idea that beauty is a small, easily justifiable purchase remains. However, given the points discussed, there are multiple factors aside from the economic climate that are impacting beauty (and lip) sales today. The playing field has evolved so much that the simplicity of the lipstick index is much less relevant today than when it was originally coined.

Looking forward for beauty sales overall, I believe it will remain an underlying dynamic that beauty is resilient in recessions and that consumers will always look to purchase cosmetics irrespective of the economic climate. However, the biggest question for me remains whether consumers will continue to contradict themselves.

They say they want slow and conscious beauty. However, we’re seeing unprecedented growth in mass and huge volumes low priced products sold, particularly on channels such as Tik Tok. I hope that growth becomes a little less frivolous and instead more intentional, and the wave of hyper consumption levels out.

Erin Keating Chief Customer Officer, Maesa

The lipstick index isn’t dead, it’s evolved. Consumers still seek affordable indulgences during uncertain times, but what qualifies as an “indulgence” has shifted. At Maesa, we’ve seen that emotional value and self-expression are still major drivers of beauty purchases, but, today, that might take the form of a fragrance mist or a sensorial hair product instead of a classic lipstick.

What’s different now is the influence of social media, wellness culture and the rise of multi-step beauty rituals. Consumers aren’t just buying to treat themselves, they’re buying to feel seen, to participate and to signal identity. So, while lipstick might not be the singular symbol it once was, the spirit of the index—small luxuries that spark joy—is very much alive across categories.

We remain optimistic about beauty’s resilience. While growth may moderate compared to the past few years, consumer demand for affordable luxury, personal care and wellness-centric products is strong. In fact, we see opportunity in categories that bridge emotional benefits with functional ones like hybrid haircare or mood-enhancing fragrance.

At Maesa, our portfolio is built on meeting real, unmet consumer needs. That puts us in a strong position to weather fluctuations in spending while continuing to drive relevance and loyalty. Beauty may not be recession-proof, but it remains one of the most emotionally durable categories, and we believe that it will sustain steady growth for the foreseeable future.

KARESS ROSEME Co-Founder and Co-CEO, Rose Neal Collective

I’ve had the opportunity to observe some powerful shifts in consumer behavior across the beauty landscape both on the ground through our fractional field sales teams and at the brand strategy level. In these times of economic uncertainty, consumers are understandably more intentional with their spending. But what’s interesting is that, while they’re cautious, they’re not necessarily spending less, they’re just spending smarter.

We’re seeing a clear willingness to invest in products that provide value and emotional resonance. Fragrance in particular has emerged as a standout category. It’s inherently genderless and deeply personal, and, in today’s environment, that matters.

In earlier years, we saw the lipstick index define recession-era beauty trends, with women leading the charge on small, feel-good indulgences. Today, we see a broader, more inclusive shift.

Men’s grooming is over-indexing, and fragrance has become a quiet luxury that spans gender and age demographics. It’s also an area where indie brands shine. Consumers can smell the difference in quality and craftsmanship, and they’re voting with their dollars.

At the same time, there’s an emotional undercurrent driving today’s beauty purchases. People are overwhelmed. Many are grieving the state of our political and cultural climate. And while not everyone can be on the frontlines, we’re seeing a rise in what I’d call “activist spending.” Our consumers understand the value they hold, and they’re choosing to support brands whose values align with their own.

It’s not just about boycotting retailers that don’t reflect them. It’s about intentionally supporting the ones that do. Most indie beauty brands today have a community or philanthropic angle, which adds another layer of purpose to the purchase. It’s not just a product that makes them feel good, it’s a brand that does good, too.

Even as overall foot traffic in stores dips, something our field teams have flagged, people are still showing up for beauty. Yes, they may be more budget-conscious, finding dupes or holding out for promotions, but they’re also willing to invest in products that deliver immediate results or emotional impact. There’s a distinct high-low pattern emerging: Saving where it makes sense, but splurging when it feels right.

Ultimately, beauty is not going anywhere. It’s always been a tool of identity and self-expression. And in a time where so many forms of self-expression are being questioned or even legislated against, beauty becomes a form of quiet rebellion and radical visibility. That’s not just a trend, that’s human.

Anna Sweeting Founder, The Equity Studio

In its original form, the lipstick index oversimplifies a beauty landscape that’s now far more diverse, fragmented and reshaped by digital influence and personal expression, but the underlying concept isn’t dead. Rather, it’s evolved. What’s really persisted is the consumer reflex: reaching for small, relatively low-cost indulgences during times of financial stress or instability.

Today, that impulse shows up across a broader, more diffuse—and endlessly scrollable—ecosystem of beauty and wellness rituals. Think lip oils, hybrid skincare-makeup and wellness-adjacent categories like supplements, bathtime regimes, skin tools and scented candles. McKinsey’s recent State of Fashion: Beauty report notes that beauty growth is slowing, but not stalling, with a projected 5% annual increase through 2030. That growth isn’t being driven by prestige lipstick, but by a wider constellation of accessible luxuries, amplified by social platforms and reframed through a value-first lens.

A $14 lip oil with TikTok virality can now carry the same emotional and cultural weight once reserved for a prestige lipstick. Consumers are increasingly value-sensitive rather than simply price-sensitive. They want real results, emotional payoff and personal resonance.

The lipstick index no longer lives in a single SKU or price tier. It now reflects a broader, savvier consumer mindset, where indulgences might be an affordable viral dupe, a travel-sized fragrance that feels personal and pocketable or a facial ice roller that turns routine into ritual.

So, no, the lipstick index isn’t dead, but it has been rebranded both by consumers and the market itself. Today, it lives across skincare rituals, sensorial moments, and self-soothing splurges.

The era of effortless, double-digit growth in beauty is behind us, but this is not a downturn. It’s a strategic evolution unlocking new, more sophisticated opportunities. What we’re entering now is a more complex, value-driven and segmented phase.

McKinsey projects the global beauty industry to grow at 5% annually through 2030, which is a healthy pace by any consumer category standard. However, the sources of that growth will be more selective, uneven and driven by smarter consumption.

Consumers are spending more deliberately, motivated by function, self-care and digital virality that fuels meaningful engagement rather than fleeting novelty, signaling a market that’s deepening and maturing instead of contracting.

They’re splurging at the top, but trading down elsewhere, not just to save money, but increasingly because they believe mass products can perform just as well. McKinsey found that 63% of consumers don’t view premium beauty as inherently superior and 24% have already traded down to mass alternatives. The middle tier in particular is feeling the squeeze.

From a category perspective, the near-term growth story will be uneven. Fragrance is holding its own as a growth category, especially where storytelling and sensory experience converge. Skincare and haircare continue to show resilience, especially in mass and masstige, where wellness and functionality converge.

Growth in color cosmetics may be more muted as routines skew more minimalist and skin-focused, but innovation and new formats could drive pockets of dynamism. Meanwhile, emerging categories—from wellness-adjacent products to hybrid formats and sensorial self-care—will continue to reshape the landscape in unexpected ways. Staying open to these shifts will be key to capturing new opportunities in this evolving market.

Regionally, North and Latin America have proven durable in the face of shifting consumer patterns. India and the Middle East are powering forward on the back of rising affluence and digital penetration. China is stabilizing, but not accelerating, and Europe remains discerning, with a strong focus on value and function.

Looking ahead, I’d expect moderated, but steady growth, particularly within mass and masstige segments, where consumers are finding competitive pricing, quality and easy access through both store shelves and social feeds. Prestige will still have moments, but these will likely be driven by innovation, brand storytelling or key opinion leader amplification, moving beyond surface-level luxury markers such as heritage positioning or status signaling alone.

Overall, my outlook is confident and clear-eyed. Beauty remains one of the most resilient consumer categories, one that has consistently proven its ability to adapt, endure and lead, a testament to its fundamental role in people’s lives. Today, that means meeting consumers at the intersection of affordability, joy and identity expression.

Future growth will depend on brands’ ability to innovate meaningfully, localize effectively and respond to a more fragmented, discerning consumer base. The playbook going forward won’t be about scale alone, it’ll be about precision, agility and sharper sense of what “value” really means. Brands will need to deliver real efficacy, transparency, and emotional resonance regardless of price point.

Marta Ponzone Founder, Terra Innovation Studio

No, I don’t think the lipstick index is dead, it’s just changed its wardrobe. Today’s version of the lipstick index isn’t about a single product. It’s about a state of mind.

• It’s now about emotional utility, not just lipstick.
• It’s shifted from status to sensorial self-care.
• And it still exists, but in new formats: lip oils, balms, glosses and affordable luxuries that deliver comfort, pleasure and escape.

Redefining The Lipstick Index

Traditionally, the lipstick index reflected consumers’ desire for a small indulgence during times of uncertainty, a $30 to $50 tube of luxury that offered joy, identity and resilience in a single swipe. That dynamic still exists, but it’s evolved.

In 2025, beauty consumers are more experience-driven and emotionally attuned. They’re not only buying color, they’re buying a moment of calm, a soothing texture, a nostalgic scent. In this new context, lipstick is no longer just a product, it’s a ritual.

At the Business of Beauty Global Forum organized by Business of Fashion, it was highlighted that in the U.S., 44% of consumers define beauty as both mind and body related, a clear sign that beauty is increasingly linked to wellness in 2025.

The “new lipstick index” captures this evolution. It’s about how people use beauty to feel better, not just look better. It’s a barometer of emotional wellbeing, not just economic stress.

The Prestige New Value Equation

While traditional prestige lipstick sales may be down, we’re seeing growth in adjacent categories—lip oils, balms and glosses—that tap into sensorial pleasure, hydration and mood enhancement. These formats offer comfort and performance, aligning with the consumer’s need for self-care.

At Sephora in the U.S., top sellers consistently land in the $25 to $40 sweet spot. This reflects a consumer who still craves quality. They want hybrid products with skin benefits, beautiful packaging, and sensorial payoffs.

Luxury packaging details—magnetic closures, soft-touch finishes, weighty compacts—are now part of the value proposition. The click of a lipstick cap, the sound of unboxing,  the feel of a formula—these sensory cues are the new status symbols in beauty.

Mass Appeal And Dupe Culture

On the flip side, we’re witnessing a wave of ultra-affordable, viral lip products—under $3 and made in China—spreading like wildfire on TikTok and in grocery aisles. These items thrive on instant gratification and curiosity-driven purchases. They are fun and function more like impulse candy than serious cosmetics.

In parallel, dupe culture is blurring the lines between prestige and mass. The #DupeChallenge on TikTok shows that today’s consumer is less loyal to heritage brands and more interested in value and function. This puts pressure on brands to move beyond legacy positioning and toward real performance, emotional connection and cultural relevance.

Beauty As Emotional Sanctuary

Despite economic headwinds, I remain optimistic about beauty. It’s not just recession-resistant, it’s emotionally essential.

Beauty remains one of the most resilient categories because it delivers more than a result. It delivers a feeling. In an uncertain world, that’s something people won’t stop seeking.

Brands that understand this and who innovate around sensoriality and emotional resonance will thrive. The new lipstick index is about the quiet luxury of feeling better, even just for a moment.

Margarita Arriagada Founder and Co-Founder, Valdé and Latinas In Beauty

I agree with the point of view that the lipstick index is very much alive and as relevant today as ever, and that it is a metaphor for small indulgences.

The softening of the lipstick category sales is not indicative of the lipstick index, but a correction given the explosive growth from the last few years. The virality of the social media space is causing distortions of certain categories that are bound to course correct, but not a reflection of an overall softness or lack of desire. The slowing of the skincare category growth trend for example is a similar situation.

As such, the challenges of conglomerates like Coty, Estee Lauder and Shiseido stem from their internal symptoms, not from a cooldown in customer's desire to consume beauty. What is accurate is that there is clearly more supply than demand, and this will continue to put pressure on price and saturation.

However, beauty is resilient. It is a feel-good category, and customers across all demographics indulge. This will not stop, but it will shift in unexpected ways as a result of competition and trends. Unexpected examples are new categories emerging like we have seen in body or suncare or the massification of beauty. Maybe luxury will reemerge. We certainly all know wellness has yet to realize its full manifestation.

One only has to look at the strength of E.l.f., and its bullish outlook to realize the ongoing growth potential at least in this segment. Beauty more and more has become cultural currency, and this aspect will keep it relevant for a long time.

Annette Rubin CEO, HydroPeptide

The original lipstick index was never just about lipstick, it was about psychology. During times of uncertainty, consumers seek out small luxuries that offer comfort, confidence and a sense of control. That behavior hasn’t gone away, but what people consider an emotional essential has shifted.

Today, we see that shift clearly in skincare. At HydroPeptide, our customers are prioritizing products that support how they feel, not just how they look—long-term, visible results paired with a sense of self-investment and ritual. It’s less about instant gratification and more about meaningful transformation.

Our consumer is at the center of everything we do, and what we’re seeing is that they’re looking for substance, trust and consistency, qualities that, for many, skincare now provides more than any other category. So, no, the lipstick index isn’t dead. It’s evolved, and skincare is now leading that evolution.

I expect beauty sales to remain healthy, but the industry is entering a period of sharper separation between brands that deliver real substance and those that rely on aesthetic or trend alone. The consumer has matured. They’re reading labels, seeking clinical validation, and asking better, smarter questions. They’re more informed and empowered than ever before.

Brands seeing sustained growth is because they’ve stayed true to their core. For us, that’s evidence-based innovation, disciplined formulation and a deep respect for skin health. We invest in peptide science not because it’s trendy, but because it works and because our consumers deserve performance they can trust.

Looking ahead, the brands that will endure are those rooted in purpose, transparency and measurable results. We’re not here to chase the next viral moment. We’re here to build lasting relationships with a consumer who expects more and knows exactly how to recognize it.

Melissa Hibbért President and Chief Brand Strategist, Beauty Founders Agency Inc.

Like all things in beauty, I am of the belief that the lipstick index has evolved rather than expired. Yes, prestige lipstick sales dropped 15% in Q1, but that statistic tells only part of the story. There is a clear surge in lip oils, lip balms and glosses, which reveals something crucial. Consumers haven't abandoned the category, they've simply shifted their preferences within it.

As a strategic consultant to emerging brands, I pay attention to not just the trends driven by social media influence, but also consumers changing lifestyle priorities. We're experiencing a significant shift in beauty preferences from full coverage looks to the glossy, dewy aesthetic. In this context, declining traditional lipstick sales don't signal economic retreat, they signal changing beauty standards.

My interpretation of the lipstick index was not solely on lipstick alone. It elevates the human factor that, during uncertain times, people gravitate toward small, affordable luxuries that provide psychological comfort and maintain their sense of self-care.

To that end, today’s beauty market has shifted from decades ago. The explosion of indie/emerging brands, direct-to-consumer channels and social shopping coupled with media-driven discovery has created countless micro-categories where consumers can find their perfect "small indulgence." Whether that's a $15 peptide lip treatment, a viral TikTok skincare serum with turmeric or a cult-favorite cream blush, to me, the overall principle remains the same.

I’ve said this before. I'm genuinely optimistic about beauty's resilience.  The real test will come if we face a genuine economic downturn rather than the current climate of inflation, political unrest and uncertainty. I suspect we'll see beauty sales prove more resilient, where mass market products may outperform prestige offerings, multiuse products will gain favor over single-purpose items, and brands that master the art of affordable luxury will thrive.

As Cristina Nuñez astutely noted, beauty provides "little pleasures" and "escape from realities," needs that often intensify during difficult times, and there is no question, we are living in challenging and unprecedented times.

All indications tell us that consumer preferences are rapidly evolving in an increasingly crowded marketplace. The brands that will thrive are those who understand that the lipstick index has evolved to the broader "beauty index," encompassing everything from skincare to nail care to men’s grooming to fragrance to color cosmetics.

Brands that adapt quickly and deliver accessible beauty products across this expanded spectrum will likely drive beauty sales growth now and into the future. The lipstick index isn't dead, it's simply wearing a different and more dewy shade.

Hillary Solomon Strategic Advisor, Indie Beauty Growth Advisory

I don’t believe the lipstick Index is dead, it’s very much alive, but, like the beauty industry itself, it’s evolved. It’s had what I’d call a modern glow-up, maybe even a little aesthetic tweak.

When Leonard Lauder coined the term, lipstick was a symbol of affordable indulgence during tough economic times. It offered a small emotional lift, a way for people to feel a bit better without spending a lot. That sentiment still holds true. What’s changed is the format. The beauty landscape today is broader, more diverse and far more complex than it was in the early 2000s.

At its core, beauty still serves the same purpose: to help people feel good. It offers joy, self-expression, confidence and a sense of care and connection. Those emotional drivers haven’t disappeared. They’re just being fulfilled in different ways. Consumers might not be buying traditional lipsticks at the same rate, but they’re reaching for lip oils, tints, hybrid products and beauty-wellness crossovers that meet the same emotional need.

So, I don’t see a dip in traditional lipstick sales as a sign that demand is declining. I see it as evidence of expanded choice. The industry has grown, and consumers are engaging differently.

Slower sales from legacy brands and companies don’t tell the full story. We’re seeing incredible momentum from emerging indie players, new product formats and innovation happening at the intersections of skincare, wellness, aesthetics and tech.

Even with current economic pressures, tariffs, inflation and shifting consumer confidence, I remain optimistic. Beauty has always been a resilient category. I expect modest overall growth in 2025, likely under 5% in the short term, with stronger performance in niche, accessible segments and areas where innovation is happening fastest.

A few areas I see driving that growth:

• Hybrid innovation: Where skincare meets makeup, wellness meets beauty or ingestibles meet topicals.
• AI-powered personalization: From diagnostic tools to customized regimens and digital experiences.
• Niche and highly engaged communities: Especially pro-aging, hormonal wellness, longevity, gen alpha and underserved groups.
• Channel transformation: Social commerce, pop-ups, experiences and immersive environments are gaining traction.
• New consumer segments and geographic expansion: Gen Z, gen X and emerging global markets are fueling momentum.

And, most importantly, beauty is still supposed to be fun. As an industry, sometimes we forget that. Consumers come to us for play, creativity and that small emotional lift that makes them feel like themselves again. That’s what gives this industry its staying power.

So, yes, I believe the lipstick Index still lives on, but it’s no longer just about one product. It’s about the role beauty plays in people’s lives. That role is still powerful, still relevant and continuing to evolve.

Elizabeth Lim Strategic Advisor and Fractional CMO, Elizabeth Lim Strategy & Consulting

When Leonard Lauder famously coined the term “lipstick index” in 2001, he noted a surprising trend: Lipstick sales rising during an economic downturn. His theory that consumers see out small, feel-good luxuries in uncertain times sparked a lasting framework for understanding the emotional pull of beauty.

Today, that idea has expanded far beyond lipstick. The modern lipstick index now reflects a dynamic and diverse beauty ecosystem spanning color cosmetics, skincare, haircare, fragrance and personal care. It cuts across price points from mass to luxury and thrives in an omnichannel environment increasingly powered by digital discovery and e-commerce.

Beauty continues to serve as both a personal ritual and a form of emotional reassurance. Even in moments of volatility, a swipe of lip gloss or a spritz of fragrance can uplift, restore and express hope—proof that small moments of beauty still carry big emotional weight.

Looking ahead, the outlook for beauty in 2025 and beyond is cautiously optimistic. While growth may be more measured amid broader economic uncertainty, analysts still project low single-digit gains across both mass and prestige segments, a sign of the category’s underlying strength. Rather than indicating a pullback, this shift suggests a normalization following the post-pandemic surge, with consumers continuing to engage, albeit more selectively.

E-commerce is poised to remain a key growth driver, fueled by AI- and AR-powered experiences like virtual try-ons, personalized recommendations and advanced diagnostics. These innovations are transforming how consumers shop for beauty, making discovery more seamless and tailored than ever.

Amazon, in particular, remains a dominant force in the space, with beauty as one of its largest and fastest-growing categories. This is due to its ease, sharp pricing and rising credibility in the premium and luxury tiers.

Even as consumers become more thoughtful about their spending, they’re not turning away from beauty, but rather leaning into what matters. Value is increasingly measured not just in price, but in purpose: skincare as self-preservation, fragrance as sensory escape, and color cosmetics as a form of expressive joy. Not every category is prioritized equally, but the emotional connection to beauty remains deep and durable.

What unites them all is the power to deliver small, tangible moments of pleasure and that, more than ever, is the heartbeat of beauty’s enduring resilience.

Nadine Tapia President and Co-Founder, Tapia Beauty Group and Latinas In Beauty

I believe the “lipstick index” coined by Lauder remains relevant, but we’re seeing a shift in how it plays out. Consumers still crave those feel-good purchases, but, with the saturation of brands and rising costs, many are trading down rather than opting out. It’s no surprise that categories like lip stains and lip oils continue to thrive, particularly at lower price points.

I’ve seen this firsthand with brands I’ve advised like Gloss Ventures, where platforms like TikTok have fueled growth in entry-level beauty categories. Products like lip stains, in particular, offer a secondary value to consumers. Their long-wear formulas deliver extended use, making them feel like a smart, lasting investment even at an accessible price.

Emmanuelle Bassmann Founder and Managing Director, In-Trend LTD

I agree with the sentiment that the lipstick effect has evolved to encompass wider beauty categories as we know that, during the COVID era of 2020/2021, nails were regarded as the recession indicator and often been referred to as such since.

As the other editors rightly mentioned, the products that have lead interest and innovation in the lip category in recent years are oils and balms. These are much more apt products to judge the relevancy of the theory today.

For me, the proof of the truth of the theory in 2025’s is via lipstick accessorization: Beautifully ornate cases, playful charms, personalized key rings, all being bought into by brands and consumers alike betting on play and nostalgia. We have seen the success of this approach, with the likes of the Labubus, and I think this is what we will continue to see succeed from beauty.

Anna Marcovici Founder, Impact Beauty Group

The problem with some of this data is that it looks at sales of large conglomerates in large retailers, thereby entirely missing indie brands and indie retailer sales. The industry today both at brand level as well as where consumers shop is much more fragmented.

I also think that the lipstick index was always meant to signify the general idea that consumers would still spend on small luxuries in a time of downturn. During COVID when lipstick sales did drop on account of the fact that people were wearing masks, consumers increased spending on other makeup and wellness products.

Today, the single most dynamic growth category within makeup is lip care. Consumers are still buying the traditional lip bullets, but have added lip masks, lip oils, lip balms, lip tints, lip serums, lip SPF, lip plumping products, lip scrubs, lip peels, lip primers and hydrating lip balm/lipstick hybrids to their basket.

So, the concept is very much relevant, but perhaps it’s time to slightly tweak the “lipstick index” and simply call it “the lip index.”

Karen Young Founder, The Young Group

The global beauty industry experienced approximately 7% annual growth from 2022 to 2024. There’s serious concern that things are slowing, that the “lipstick effect” is fading. I’m optimistic we’ll get through this and bounce back.

Consumers are increasingly broadening their definition of “beauty” to cover categories we, the traditional beauty industry, don’t track—supplements, aesthetic treatments, fitness trackers, to name a few.

Look how well beauty got through the pandemic! Consumers, some new to the category, reached out for refuge and self-care. Beauty continues to be a self-indulgent purchase most of us don’t feel we need to defend.

Beauty’s now close tie to wellness makes it all the more desirable and a completely integrated part of many consumers’ lives. For most shoppers, beauty is now lifestyle.

Political and economic volatility do raise questions. Tariffs, layoffs and increasingly fragile consumer confidence could make the industry vulnerable. Providing value, personalization, proof of efficacy, innovation and the promise of sustainability in some form will continue to be critical.

And don’t forget aspiration and storytelling. Consumers are smarter and better informed than ever. They have plenty of spending choices.  We, the beauty industry, can’t let down our guard. Optimism and hope are great, but they’re not a strategy.

If you have a question you'd like Beauty Independent to ask beauty entrepreneurs, executives, investors and consultants, please send it to editor@beautyindependent.com.