'Generational Shift': There's One Industry That's Expected to Keep Booming, According to Bank of America Analysts The "lipstick effect" has expanded to cold plunges and red light therapy.
By Erin Davis
In January, Bank of America analysts noted that self-care services like salons and gyms were notable economic standouts that have been "solid" for the past two years. Boomers led beauty spending, while Gen Z and millennials aimed for more self-care and gyms, including wellness trends like red light therapy and cold plunges.
Now, analysts are seeing a "generational shift" in spending towards "healthy habits" that are driving "growth in wellness-related stocks," per a Bank of America note on Tuesday.
Business Insider reports that Gen Z and millennials are prioritizing movement and fun, spending their money on leisure activities like pickleball, and wellness-focused discretionary spending like anti-aging treatments.
Related: The Majority of Gen Z Is Streaming Movies and TV Shows at Work, According to a New Survey
Meanwhile, Investing.com notes that credit and debit card data from Bank of America showed a year-over-year increase in fitness spending of 7% in February, the biggest growth in a year and a half.
"We believe there is an ongoing generational shift toward healthy habits, which is supportive of wellness stocks," Bank of America wrote.
The bank also wrote that younger generations are shunning the bar and instead opting for the gym.
"Millennials and Gen Z are allocating a higher percent of their budget to fitness [that's] surpassing bars/pubs," Bank of America noted.
In November 2024, a report from the Global Wellness Institute found that the industry reached a record-high worth of $6.32 trillion in 2023 — larger than the pharmaceutical and sports categories.
The data could lead to what Business Insider calls a "recession-resistant corner of the market."
Still, spending on beauty, or what is known as the "lipstick effect," is not unheard of in times of economic strife.
During the Great Recession in 2008-2009, cosmetics expenditures increased among women ages 18 to 40 (though they gravitated towards lower-cost brands), per the Journal of Behavioral and Experimental Economics.
