Will Beauty Remain Resilient this Holiday Season?

US consumer sentiment and intentions related to the 2024 holiday shopping season are improved compared to the last two years, but are still falling short of 2021 levels in most cases, according to experts at Circana, a leading advisor on the complexity of consumer behavior. Most holiday shoppers plan to spend about the same as last year, but there is an increase in those planning on spending more, according to Circana’s annual holiday purchase intentions consumer survey.

On average, consumers plan to spend $771 on holiday shopping this year, which is 2% higher than last year’s spending intentions, but still 2% below their plans in 2021, according to data released by the Chicago-based company.

Expectations for Beauty

How will beauty fare during the 2024 holiday season?

“This upcoming holiday will test the resiliency of the beauty industry. In fact, beauty’s resilience has made our industry an anomaly of sorts; while other industries experienced ups followed by downs, beauty has just gone up, then up, and up again,” said Larissa Jensen, global beauty industry advisor at Circana.

“When looking across the mass and prestige sides of the business, the holiday period is more important to (and has a greater impact in) prestige beauty, which epitomizes the indulgence in little luxuries during the holiday season. For that reason, we look to the performance in prestige during holiday as an indicator of where the consumer mindset is throughout the season with regard to our industry,” said Jensen.

Since 2021, all prestige beauty categories have experienced strong growth during the holiday season.

According to Jensen, there are many macro and micro factors at play this year that could impact whether the industry has another strong year. Some may impact sales negatively, others more positively.

“In prestige, the higher income shopper has been a key driver to beauty industry success, but we have begun to see some pullback and softness in beauty spending among higher income consumers earning between $100K to $150K annually. They are one of the larger consumer groups among high earners and have traditionally shown strong spending behavior,” noted Jensen.

She continued, “We see surges in growth coming from high income households with children under 18-years-old, an indicator that parents are indulging their Gen Alpha children with prestige beauty products. Based on the social media virality of this new generation of beauty enthusiasts, this dynamic shows no sign of slowing down any time soon and could be a pivotal growth driver during holiday.”

Circana is forecasting a positive holiday season for the prestige beauty category. Growth will be softer than in years past, but the industry’s resilience should continue to shine through this holiday season, said the market analysis company.

Holiday Sentiment: The Big Picture

Overall, Circana says both the number of consumers looking forward to this holiday season (64%) and those who say simply going out shopping during the holidays puts them in the holiday spirit (57%) are the highest they’ve been in four years. 

“Spirits are up heading into the fourth quarter, and consumers are looking to hold on to that feeling of positivity,” said Marshal Cohen, chief retail advisor for Circana. “Financial concerns are still present for U.S. consumers, but they have eased which is bringing opportunity to retail this holiday season.”

Consumers are seeking a holiday escape, and that includes some retail therapy, finds Circana. This year, more consumers see the holidays as a break from everything that’s happening in the world (66%). The holiday shoppers who say they plan on buying more gifts for others to bring them joy during challenging times (40%) and those who plan on buying more gifts for themselves as part of their own “retail-therapy” (28%) have both increased from last year, but have not yet reached 2021 levels.