As the current economic climate in the United States continues downward, several trends have begun to emerge within the fashion and beauty industries—affecting the shopping behaviors of the average consumer and shifting the style landscape.
Reacting to the growing economic turmoil within the country—including the cost of living crisis, rising grocery bills and growing unemployment rates—consumers are using what purchasing power they have left to spend on their outward appearance and mimic the feeling of a luxurious lifestyle. From the emergence of maximalist styling from modern retailers and celebrity stylists to the rising purchasing rates of small luxuries within the beauty industry, the buying behaviors of modern shoppers have shifted dramatically—following similar patterns documented during previous eras of economic decline.
In an interview with Nick Johnson, an Iowa-based content creator who regularly shares videos on fashion history under the social media handle @nickthrowsafit, the creative agreed that the economic state of the country is a significant factor when discussing the current changes within the fashion industry, “Obviously, this is a multifaceted topic, influenced by many moving parts, but the parallels between economic shifts and fashion trends are hard to ignore.”
One way to best examine this recent shift in consumer behavior is through the lens of the high-heel theory. The concept, first theorized by economist George Taylor in 1926 who used skirt hems to illustrate the relation of fashion silhouettes and financial prosperity, consistently indicates that consumers are more likely to gravitate toward maximalist and traditionally glamorous fashion and beauty trends during a time of economic decline, such as high heeled shoes.
While the original theory uses high heels to demonstrate the correlation, modern iterations of the concept can be seen with the overwhelming appearance of maximalist design during fall Fashion Week and the resurgence of the previously ostracized off-center hair parting from celebrities on the red carpet. After years of minimalistic clothing and sleek middle-parted hairstyles dominating as the norm for chic, on-trend styling, this sudden switch in aesthetics references fashion and beauty trends popular during times of economic stability and freedom.
In the same interview, Johnson agreed with this subliminal reference to past trends, saying, “Economic turbulence has a way of pulling people toward nostalgic fashion. Both the economy and fashion are cyclical in nature, and their parallels are fascinating. When the economy is booming, fashion tends to embrace the future with sleek, innovative and forward-thinking styles. But in uncertain times, people look backward, finding comfort in heritage and archival styles that feel familiar, reliable and enduring.”
Johnson continued, saying, “But why does this happen? While nostalgia is part of it, I think social media has amplified the effect. Platforms like TikTok and Instagram have accelerated conversations around quality, materials and sustainability, making people more intentional with their purchases. This has led to the rise of secondhand shopping, as there is a usually a palpable difference in the quality of mass-produced garments of the 80s and 90s compared to now. The rise of secondhand shopping has also made archival fashion more accessible, pulling older styles back into the mainstream.”
Another theory that helps to illustrate the causation behind the economy’s current impact on the consumer and their buying habits is the lipstick effect. In simple terms, during times of economic duress, shoppers feel the need to spend their money on small luxuries like lipstick and perfume as a means of indulgence. Additionally, these purchases are often made quickly and without much planning. A supporting statistic from Circana’s 2023 makeup consumer report found that lipstick and lip gloss are more likely than any other makeup products to be purchased on impulse.
Johnson explains the reasoning behind this psychological instinct in his own words, saying “At our core, we crave novelty and quality, even when money is tight. The lipstick effect explains this perfectly. In tough economic times, people still want to feel good, so they buy affordable luxuries instead of big-ticket items. A $5,000 Chanel bag might be out of reach, but a $50 Chanel lipstick still gives that aspirational dopamine hit.”
Taking a look at some of the most recent beauty rollouts, one will see that lip products were not only a majorly successful category for cosmetic retailers, but a significant cultural talking point. From Rhode’s viral peptide lip treatment to Glossier’s signature balm dot calm, the market is currently completely saturated with innovative lip product releases—and based off the virality of these products on social media, to many consumer’s delight.
As shoppers cling to nostalgic styles from an era of economic security and keep their mind preoccupied with smaller luxury purchases, their shifting buying behaviors impact the fashion and beauty industries at large—trickling up to create major change and creating new trends. It won’t be long before the styles and silhouettes that were once considered outdated are fully reintroduced into the mainstream with a new emotional impact that subliminally soothes consumers during this turbulent time for the economy.