There’s a myth that refuses to die in the beauty industry: that during a recession, lipstick sales surge. It’s called the “lipstick index.” It’s so persistent that when I was fundraising, tech investors with zero insight into the space were suddenly interested. Their rationale? Beauty is recession-proof.

Only problem is, there’s no data to back that up.

The “illusory truth effect” was first studied in 1977. It’s the idea that the more a lie is repeated, the more believable it becomes. A 2014 follow-up study titled “People with Easier to Pronounce Names Promote Truthiness of Claims” reinforced the point: people are fallible. When someone perceived as credible says something, we're less likely to question it and more likely to believe it.

Despite countless articles echoing the lipstick index, I found one (thank you Wall Street Journal) that actually examined both the cultural and sales context when the term was coined. In 2001, Leonard Lauder, chairman of Estée Lauder, claimed lipstick sales rose after 9/11. MAC, an Estée Lauder brand, had to run extra shifts to meet demand.

But that was 2001. What about 2008?

By then, the lipstick index had already flopped. According to Allure, it was now the “liquid foundation index.” The Financial Times reported that lipstick sales declined while foundation sales surged. So, what changed?

Newness. In 2001, celebrity makeup artist Laura Mercier launched her line—starting a trend. More brands including celebrity makeup artists entered the market. MAC began dropping more frequent collections. Combine this with consumer confidence being high and you had a beauty boom.

By 2008? Same newness, none of the confidence. Beauty wasn’t recession-proof. There was excitement in some categories and fatigue in others. The lipstick index wasn’t a proven economic indicator; it was an offhand comment from a Lauder.

Today, we’re in a similar place—but this time, it’s skincare taking the hit. From 2018 to 2019 (when I decided to start a brand), skincare was booming. Drunk Elephant sold to Shiseido for nearly a billion dollars. BeautyCounter was the most Googled skincare brand. Glossier was the internet’s darling, with the tagline “Skincare first, makeup second.” The industry, as another Glossier line put it, looked good.

Then came the pile-on. K-beauty flooded the market with low-cost products promising the same results as luxury or clinical brands (I have thoughts). Lip products were folded into the skincare category, inflating numbers (lip gloss is great, but it’s color cosmetics, not skincare—your epidermis isn’t involved). Then came 2020. COVID hit. We were indoors, away from derms and estheticians, and willing to experiment. Skincare sales surged 22% while the rest of beauty slumped.

But did that make skincare, or beauty, recession-proof?

No. It made it trendy. And all trends, when they get too big, contract.

Beauty trends follow a familiar cycle: when there’s too much newness, too much sameness, the customer corrects the market. We’re currently in the correction. But with discomfort comes the ability to ask questions and growth.

So, as a beauty founder, here’s my advice:

1. Treat your customers the way you’d want to be treated.
Someone gave you their hard-earned money. How would you want to be treated in return? Invest in customer service. Make subscribers feel like VIPs.

2. If you’re cash-constrained, slow down. Focus on core.
Dieux has raised relatively little, considering our scale. We haven’t launched many products. That’s intentional. Instant Angel and Deliverance have a loyal following—and that loyalty comes from science and price (trust me, we debate price constantly at HQ).

3. Show the value.
If you’re charging a premium, explain why. Show results. Skincare isn’t fast fashion. If you launch at SHEIN speed, expect to be replaced just as fast.

4. Stop chasing quick wins. Grow slow.
The slow burn builds real loyalty.

5. Use social media as a listening tool.
Watch what people love—but also what they don’t. The unmet need? That’s your opportunity.

And finally: every dip is followed by a rise. Lip gloss dropped 14% in 2008. Look at the butter balm girlies now. Entire empires have been built on lip. Things might be rough for a few years, but if you’ve got a differentiated POV, real products, and IP you actually own, you got this.

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