When it comes to finances, fashion is not as extreme as it is with clothing, which promotes new colors, patterns and cuts every season. But the financial word jungle is also subject to certain trends depending on the economic situation and market events.
Over the past few months, I’ve come across some funny terms and concepts. So here’s (my) curio collection to expand your financial voci and food for thought. A smile and additions in the comments are most welcome.
When a crisis comes, consumer behavior changes. For example, we seem to prefer small luxury products instead of large, more expensive new purchases to make everyday life easier in times of crisis. This phenomenon is called Lipstick effect (lipstick effect) or index referenced: and goes back to 1929, when an increase in lipstick purchases could be seen during the crisis in the US. Similar observations were made, for example, after the terrorist attacks of September 11, 2001, when a remarkable number of lipsticks were sold. The Lipstick Index was created by Leonard Lauder, the heir to Estée Lauder.
as economic indicator However, the lipstick index falls short, as there are also many other small luxury goods that make everyday life more beautiful, and a timely global measurement is not so easy. As an example of whether something is wrong: according to the report of the German Association for Personal Care and Detergents, Sales of products such as eyeshadow, lipstick and nail polish in particular increased by 15.7 percent in the first half of 2022the fragrances even achieved a plus of 56 percent.
If you put this theory in want to implement practical systems or behaviorsthen you can take a look at the Inventory Developments of Cosmetics Manufacturers such as the market leader L’Oréal, Estée Lauder etc. or the large companies such as Unilever and Nestlé. Or you consciously relies on alternatives such as natural cosmetics, organic, locally produced hygiene and beauty products and not only make your daily life more beautiful with this little luxury, but also strengthen the local economy and smaller companies.
shrinkage inflation the phenomenon is called when Portions of consumer goods such as soft drinks are decreasing in weight, size or quantity, while their prices remain the same or even increase. You simply get less content for more money.
According to reports from CNBC, 64% of US consumers are concerned about smaller portions while prices are flat or rising. Why is this happening now? Shrink inflation is not a new phenomenon, but in times of rising inflation in combination with higher energy prices, rising commodity prices and supply shortages, companies try to pass prices on to us. The phenomenon is mainly observed with, for example, snacks, frozen products, drinks, but also with bread and pastries. Is your favorite muesli package suddenly slimmer and does it cost the same, if not more? Then there is shrinkage. These changes are often not even noticeable in everyday shopping, as the quantities and portion changes don’t have to be huge.
Unfortunately, there aren’t that many ways to protect yourself from shrinking, a price-weight comparison helps the most when shoppingie read the fine print on the packaging and calculate whether the competitor’s product would contain more. If it gets too colorful for you, you can file a complaint with the manufacturer or price monitor.
Last year, finance was not very popular: If you look at Google Trends’ analytics data for 2021, the top search term for Switzerland was “Euro 2021” followed by “Corona Switzerland”. As for what questions, “What am I cooking today” led the list and the how questions were almost all dominated by Corona, interestingly in fourth place was “How many inhabitants does Switzerland have” – for anyone who wants to know now: 8,738 million .
According to Google Insights, interest in financial topics has increased significantly this year. For example, searches for ‘why’ and ‘expensive’ have increased by 20% globally in the last 6 months alone, terms like cost of living have increased by +60%. This is no surprise given the economic situation.
The next trend is more exciting: Saving is increasingly combined with sustainability. For example, the questions about energy saving have increased, but also about “second-hand” or “reuse” (re-use). This is also reflected in the increasing number of second-hand fashion resale apps – according to studies, the second-hand fashion market is expected to grow by 124% to CHF 218 billion by 2026 and by 2022 it should be +24%.
This opens up new opportunities for all of us, to save money sustainably when consuming, but also to use future-oriented niches in investing. There are already approaches for this, for example in the form of investments in shares in sustainable companies or companies involved in the circular economy. There are already funds and ETFs for the circular economy, for example from Blackrock, Robeco Sam or the BNP Paribas Circular Economy Leaders ETF.
As you can see, in addition to economic news (interest rates rising, inflation rising, etc.), you can also look up completely different sources for new ideas. In any case, I always really like it – if you want to check out Google’s trend analysis for yourself, you can find it here. Have you seen shrinkage yet? And what new and bizarre financial terms and trends have you come across in recent months?
