Marketing Matters
Hemlines, Movie Tickets May Tell State of Economy
Why should marketers be interested in the sales of men’s underwear, the shortness of women’s skirts and the intensity of Marine Corps recruitment ads?
Some people say these and other unusual indicators can predict the future of the economy.
Predictions abound this time of year, and if you want to study deeply, the Financial Forecast Center provides six-month forecasts on many topics.
It offers predictions on money rates, stock indexes, the consumer price index, retail sales, industrial production, corporate profits, energy and commodity prices, employment and income, just to name a few.
However, Patrick Newport, an economist with IHS Global Insights, threw cold water on predictions when he recently told the Motley Fool, “Anybody who says they know what’s going to happen doesn’t know what they are talking about.”
Still, I was intrigued by a list of bizarre economic indicators that Business Insider compiled. That’s what gets us to hemlines, underwear and the Marines.
You might recognize the Hemline Index. Developed during the 1920s, it theorizes that the shorter women’s hemlines are, the better the economy. Retail buyers discount the theory, but longer skirts did become fashionable after the 2008 downturn.
The Underwear Index states that sales of men’s skivvies drop when the economy tanks. Mintel, a retail research firm, confirmed a 2.3 percent sales decline during the recent financial crisis.
Estee Lauder Chairman Leonard Lauder conceived the Lipstick Index, which says women will buy lipstick instead of more expensive accessories during hard times.
New Yorker magazine says a better-looking restaurant wait staff is a sure indicator of recession. Hot waiters and waitresses go with a cool economy on the theory that the eye-catching servers would be in better jobs otherwise.
The Popcorn Index theorizes that more people go to the movies to escape reality when the economy is sour. Not surprisingly, the 2009 recession year was one of the best ever at the box office.
The Beer Consumption Index examines at-home beer consumption compared to imbibing at restaurants and bars. Recent anecdotal evidence: European employment in breweries, bars and restaurants fell 12 percent from 2008-2010, compared with a 2 percent drop in total employment.
The Marine Index looks at the tone of advertising messages. In tough times, when interest in enlistment can outweigh the need for Marines, the Marine Corps’ ads start to show some of the really difficult aspects of service, thus discouraging some potential enlistees.
If you want some more truly scientific indicators, I suggest studying the London-based Consensus Economics, which polls 700 of the world’s leading economists.
“History has shown that the most realistic predictors (of future economic activity) are consensus-based surveys,” said Richard DeKaser, deputy chief economist at the Parthenon Group in Boston.
But lipstick sales, hemlines and other off-the-wall research makes for far better water-cooler talk.
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