When you think of rewards, you probably think of travel, gift cards, promotional items or general ‘gifts’. Your mind probably never leaps to lipstick – but maybe it should.  You might think that when money is tight on an economical level that we all hunker down, eat beans on toast and wait for the economy to pick up – but that’s not quite true.

Reports have shown that luxury items actually see an increase when times are hard, with lipstick being the stand out item.

The Lipstick Effect

The term “the lipstick effect” came into focus in 2008 when a rise in sales of beauty products pops in – and it seems to be happening again – even when disposable income is at a low period. There’s conjecture that these spending habits are linked to periods of anxiety and the recent incidents across the UK have sparked an interest in comforting luxury treats – Leonard Lauder is quoted as saying that he noted his company’s sales of lipstick rose after the terrorist attacks in NY.

During the lipstick season, people aren’t spending their money on sensible things. Beds and washing machines go into a downturn. When fears are out there around job security, finances and the state of the World we live in, it’s those spontaneous treats that do so well.

One study ‘Boosting Beauty in an Economic Decline: Mating, Spending, and the Lipstick Effect’, found when unemployment increased, people allocated smaller portions of their monthly spending budgets on electronics or leisure/hobby products.

It’s a retail learning that anyone working with rewards can take comfort from. If you’ve ever lamented your budgets or sought more excitement from your rewards strategy, you could in fact already be on the right path.

According to John Lewis, beauty product sales are up more than 7% on last year and womenswear is up 4.4%. Sales of lipstick rose 31% in the three months to the end of June against the same period last year with Instagram-friendly brightly coloured summer lip shades especially highly sought after.

Showcase your smaller rewards

Now could be the perfect time to showcase your little treats, focus on your lower and middle tier performers and even look at ensuring everyone feels like a winner, with smaller rewards and treats that benefit the many, vs the larger, elite rewards that are only available to the few.

Even big companies mimic small reward strategies and keep it simple.

The Starbucks loyalty app not only offers standard reward points and promotional benefits, but looks at the ‘little things’ – allowing users to skip the queue and order from the comfort of their seat, whilst the simple ‘2 for 1 ‘ cinema offering, sponsored by Orange and now compare the market is ranked as one of the most successful reward initiatives around.

Make sure your comms are in line too. Now is the ideal time to make use of Summer imagery, bright, editorial style images and to highlight the benefit of the reward.

Take a look at this great guide on how to sell your rewards internally from Reward Gateway.  

Sali Hughes, beauty guru says it best:

“It is truly the most joy you will ever extract from a single make-up item. It is a lovely and satisfying object in itself (I still occasionally buy a nice lippy to bring cheer on a gloomy day, despite the fact I get sent hundreds).”