Estee Lauder chairman Leonard Lauder introduced the lipstick index as a way to gauge the state of the economy after the 9/11 attacks, noting that the purchase of small luxury items like lipstick tends to increase during economic downturns. In 2020, during the Covid pandemic, the lipstick index was replaced by a skincare index as people wore masks and worked from home. Now, as the US begins to rein in spending after the pandemic, Sephora reported record sales and data shows that prestige beauty sales are outpacing mass beauty sales.
Neela Montgomery, CEO of Overeon, discussed the resilience of the beauty industry during uncertain economic times. She explained that the self-care aspect of beauty purchases has made it more resistant to broader economic trends. With the continuous innovation and new trends in the beauty industry, products like Bare Minerals Lip Gloss Balm offer customers a small luxury at an accessible price point. Skincare has been a dominant trend in the beauty market, followed by fragrance and makeup, making the industry resilient across all demographics.
In terms of social media trends, Montgomery mentioned that TikTok and other platforms are influencing beauty sales, with a focus on responding to relevant trends. Social selling has become a significant aspect of brand engagement, with communities playing a crucial role in promoting products. Clean beauty has become a buzzword in the industry, with a growing focus on natural ingredients and a more authentic, real look. Montgomery also discussed the rise of informed consumers who are knowledgeable about ingredients and products.
The Federal Trade Commission is investigating Microsoft’s deal with AI startup Inflection, amid increased scrutiny of the AI industry by US antitrust regulators. The investigation focuses on whether Microsoft failed to disclose its investment in Inflection as an acquisition to the government. Antitrust officials at the FTC and the Justice Department are working on an agreement to jointly oversee AI giants like Microsoft, Google, and Nvidia, with a focus on preventing abusive and anti-competitive behavior in the AI sector.
Upcoming events this week include Treasury auctions for 3-year notes, the release of the OPEC Monthly Oil Market Report, the Federal Reserve’s interest rate decision and economic projections, and earnings reports from Signet Jewelers. The US Bureau of Labor Statistics will also release the Consumer Price Index for May and the Producer Price Index. The Federal Reserve Board will submit reports to Congress on monetary policy and economic prospects for the future.
