The Lipstick Efect Theory was first popularized by Leonard Alan Lauder because sales of his lipstick products were very significant and tended to increase when the economy in America experienced a recession. There are two reasons psychology explains, namely Self reward when the economy is difficult people need a little happiness or pleasure to relieve stress. Affordable luxury everyone wants to feel luxury even on a small scale in difficult economic conditions to maintain their social status and women usually tend to increase investment in appearance to attract financially stable partners because our economic behavior will affect survival instincts.
How to avoid the lisptick effect?
1. Put the items we will buy in the basket
If we follow our desires continuously in the end it makes us do consumptive behavior by buying things that are not so important and needed just to find a little pleasure in affordable luxury goods. try storing the items you will buy in the basket for one week if in one week you are not interested in the item it turns out you really don’t need the item.
2. Implement Abundance mindset
Abundance mindset is shopping with the mindset that abundant resources are unlimited success and not stuck in thinking “if you don’t buy now you will run out” people who apply abundance mindset will think about long-term satisfaction and not instant pleasure in order to manage finances better.
3. Budgeting planning
Still applying the Budgeting planning method for expenses, every thing we want to spend you can write down so you can see how important the list of items in the expenditure and what items are needed.
The impact of the lipstick effect for consumers is the illusion that finances are stable, finances are smooth when in fact we are on the verge of a recession. Causing unproductive spending and being trapped in consumptive behavior. However, this phenomenon can also be an indication for the industry to continue to meet consumer needs even though the economy is unstable and stressful even in uncertain economic situations.
