Consumer Marketing: Buying Feelings in Hard Times

In economic turmoil, consumer behaviour shifts from rational spending to emotional survival. For marketers, this means understanding that people buy feelings, not products. Whether we’re discussing matcha, Labubu collectables or Beanie Babies, emotional and psychological drivers determine what succeeds and what fails.

The Lipstick Effect: Affordable Indulgence

The lipstick effect, the idea that consumers splurge on small luxuries like lipstick during economic downturns, has long been a reliable trend in the economy.

Matcha is a modern example of the lipstick effect in action. During economic downturns, people avoid big luxuries but still spend on small treats that make them feel better. Brands like PerfectTed position matcha as an affordable indulgence, framing it as a daily self-care ritual rather than just a source of caffeine. Their bright, aspirational packaging and messaging focus on energy, calm, and mood-boosting benefits, creating a feeling of ‘I’m treating myself to something premium’ without the guilt of overspending. Like lipstick, matcha offers a small, accessible way for consumers to feel healthier, uplifted and part of an aspirational lifestyle even when money is tight.

The Labubu Boom: Cute Collectables in Hard Times

If you haven’t been living under a rock, you know what a Labubu is. These collectable plush toy monsters have exploded in popularity from China’s PopMart. They feature celebrities like Marc Jacobs, Olivia Atwood, Rihanna, Dua Lipa and Kim Kardashian (to name a few), as well as every influencer you follow.

However, they began to gain popularity just as the country emerged from the pandemic in late 2022, according to Ashley Dudarenok, founder of China-focused research firm ChoZan.

“Post-pandemic, a lot of people in China felt that they wanted to emotionally escape… and Labubu was a very charming but chaotic character,” she says. “It embodied that anti-perfectionism.”

One of the key drivers of Labubu’s success is ‘blind boxing’. PopMart sells Labubu toys in mystery boxes, meaning consumers don’t know which character variant they will get. This taps into the dopamine hit of gambling psychology: creating excitement, anticipation and repeat purchasing to complete collections. For marketers, blind boxing is a powerful tactic as it turns a single transaction into an ongoing engagement loop, encouraging consumers to spend more in pursuit of a desired outcome.

All in all, it’s obvious Labubus are not purchased for functional use. It is bought for how it makes consumers feel – nostalgic, connected, part of a hype-driven community. Labubu succeeds because it sells identity, community and emotion, not functionality.

Beanie Babies: The historical parallel with marketing lessons

As a millennial, I feel like I’ve seen this all before. The Beanie Baby craze of the 90s is the perfect case study in emotional marketing. Ty Inc. created an article scarcity by retaining certain designs, restricting retailer orders further, and fulfilling the hype. Like Labubus, people didn’t buy them for their functionality (there was even a coveted Princess Diana Beanie Baby to raise money for the Princess Diana Memorial Fund). People collected them for emotional and social reasons. The feeling of ownership, the joy of collecting and not forgetting the hope of future value.

However, when the resale market collapsed, many Beanie Baby collectors felt that they were left with worthless toys, but the emotional cause remained part of the consumer culture. After the end of the Beanie Baby boom, you would see them lined up at masses of car boot sales, in charity shops or just in the lofts of consumers gathering dust. Labubu fate is sealed: hype, scarcity, emotional connection, and community-driven marketing.

As Winston Churchill once said, “The farther backward you can look, the farther forward you are likely to see”. I suspect Labubu will have the same sad fate as the Beanie Baby.

Nostalgia Marketing Peaks

Nostalgia marketing will always be an easy win, as it sells on emotion over functionality or both. Consumers crave comfort, familiarity and escapism – all of which nostalgia delivers effortlessly.

Overconsumption and Social Media Trends

Social media platforms accelerate overconsumption by normalising daily micro-indulgences, aesthetic hauls and hype-driven purchases. Viral collectables like Labubu or nostalgic reboots benefit from these trends, gaining cultural capital and aspirational value through aesthetic and emotional storytelling.

 Key Takeaway for Marketers

Consumers buy feelings, not products. Whether it’s lipstick marketed as a small luxury, matcha as a ritual, Labubu plushies as emotional companions or Beanie Babies as future investments, successful brands tap into psychological and cultural insights.

If you need a marketing campaign that doesn’t end up in  landfill, we would love to hear your ideas. Contact us here.