Affordable indulgences are substituted for more expensive desires during times of economic stress: that's the ''Lipstick Effect.''
The theory was first forwarded by Leonard Lauder, the chairman of the Estée Lauder™ cosmetics company. After 9/11, Lauder noticed a sharp increase in lipstick sales with a corresponding decrease in sales of more expensive offerings. His theory was that consumers were stepping back from more expensive purchases and substituting more economical indulgences--such as lipstick.
As consumers cut back on spending for non-essentials, they will also be looking for economical variations or substitutes for the things they really want but can no longer afford. In addition, consumers will spend their money on inexpensive rewards and morale boosters--if they're priced reasonably enough to justify the indulgence.
What does that mean for the jewelry designer-artist?
Make it easy for a shopper to say ''Yes!'' to your jewelry. Go ahead and create showcase pieces--the kind that draws oohs and ahhs--using gemstone beads and precious metal findings. Then add inexpensive variations nearby. Some ideas for creating economical versions of your line of jewelry:
Draw shoppers into your space with extraordinary pieces and offer them an economical way to take a piece of that magic home with them.
Design Idea A8U7 created with multiple complex dangles in
Swarovski crystal and 14kt gold-filled findings.
Design Idea 98M7 is a simpler version in economical
glass-based pearls and gold-plated components.
" I am teaching a beading class at the moment that has found most of these hints and suggestions very valuable. My students are older and interested in savings."
||We would like to share some of the customer comments we received in response to the article, "Add to Jewelry Sales with: The Lipstick Effect," featured in the January 25, 2011 newsletter. Please keep in mind that the comments expressed below are those of our customers and do not reflect the views of Fire Mountain Gems and Beads.
"How did I like this resource, the "lipstick effect"? I did not find it useful at all, in fact I disagree with your basic premise. I will not be making "cheap" versions of my creations from plated findings. My reputation and skill are the only real items that I have to sell, and if I give away my reputation for making quality items that last by using cheap "look alike" components - then what? The majority of the profit I make is not based on providing cheap components, it is based on my time doing quality work and providing what the customer wants."
"I thought that was a very creative idea!"
"Hello! Regarding your article on "Lipstick" effect. I have been doing this ever since I started making jewelry. My customers know all my items are plated. I have very nice jewelry at very affordable prices, and my customers love it. I be sure and let them know to buy cleaning cloths, and show them how to clean the findings without pulling the piece apart. We have so much fun, good sales and repeat business at the shows. Thanks!"
"Hi! Loved your jewelry newsletter, and the articles on "lipstick effect" and "springboard effect". Thanks for sharing!"
"This was a great article that reinforced what I had been thinking was going on with the economy. It was the basis for my plans for the Spring Art shows, and I feel invigorated as I make plans to build my inventory. Thank you for helping."
"I loved this topic - it really hits home and comes up with possible solutions to the economic situation. Thank you and keep up the great work!"
"I would prefer to spend my money on quality rather than a cheap lookalike that ends up being thrown away. Real gold and silver ... nothing like it!! I love the company, keep up the good work."
"I believe it is very important to have some jewelry that is affordable to most people. It has to be clear that brass is not gold and plated silver is not sterling. I think people like to have a choice. I believe only the snobs of this world think otherwise. Some of my favorite jewelry (made by others) have become my staples over the years and it's amazing how often people tell me they like them."
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