Assessing the impact of Lipstick Effect on consumer choices. Evidence from a Masstige context.

This paper extends the body of marketing research on the role of “Lipstick Effect” on consumers’ decisions, within a New Luxury context: fast fashion jewellery, as an emblematic example of New Luxury goods. Originally conceptualized by (Silverstein et al. 2003), New Luxury (particularly, its masstige goods category) apply marketing techniques traditionally employed by prestige brands (e.g., creating an aura of exclusivity), to commoditized product categories. Lipstick Effect has not been widely considered by academic research. During hard economic times, people tend to buy less expensive prestige goods. The “Lipstick Effect” (e.g., Nelson, 2001; Jonathan, 2008), first observed in cosmetics, has been noticed in major downturns such as the Great Depression, and the 2008 crisis (Creasey, 2011). This paper considers masstige goods as one of the most visible market response to the Lipstick Effect. To explore the impact of Lipstick Effect, this paper uses income as a moderating variable on the linkage between the major components of service quality and behavioural intentions, in a New Luxury context. 488 questionnaires have been collected within stores of an Italian jewellery retail chain. Results show that the perception of store atmosphere still appears to be stronger for higher income consumers; lower-income consumers put a greater emphasis on more material attributes of the offering (i.e., staff interaction).