U.S. consumer sentiment for the upcoming holiday shopping season is more optimistic than in the past two years, according to Circana’s 2024 Holiday Purchase Intentions Report. Shoppers plan to spend an average of 2% more than they did last year, Circana data reveals, with Black Friday expectations reaching a four-year high as consumers anticipate the best holiday deals.

When it comes to beauty products, 29% of shoppers intend to buy beauty items as gifts this year, a slight increase from 2023. Notably, the report highlights that 41% of households with children plan to purchase beauty gifts, a figure that is 11 percentage points higher than the overall average

“Prestige beauty epitomizes the indulgence in little luxuries and acts as an indicator of the consumer mindset for the beauty industry overall,” said Larissa Jensen, Global Beauty Industry Advisor at Circana.   “This holiday season, its resiliency will be tested. There has been some pullback in spending throughout 2024, but big increases in prestige beauty spend from higher-income households with children under 18-years-old indicate parents are indulging Gen Alpha with these products. The social media virality of this new generation of beauty enthusiasts shows no sign of slowing and could be a pivotal holiday growth driver.”

Sales Performance by Category

Heading into the holiday season, the U.S. prestige beauty market grew by 7% to $22.8 billion, while mass market sales experienced a 2% increase in sales, versus the same period last year, according to Circana, a leading advisor on the complexity of consumer behavior.

Makeup, the largest category within the prestige segment, grew by 5% in both dollars and units sold. The lip segment in particular continued to shine with a 21% jump in dollars and a 23% increase in units sold. This growth can be attributed to the rising popularity of tinted lip balms and oils. The industry is responding to this consumer demand by launching more of these products, resulting in a doubling of dollar sales tied to launches this year through September, compared to 2023. Blush is proving to be another consumer favorite this year, with sales up double-digits.

According to Circana’s Complete Beauty data, masstige skin care brands are outpacing prestige skin care brands – growing six times faster. This narrative unfolds when exploring prestige market trends for the category: skin care was the softest growing category across U.S. department and beauty specialty stores through the third quarter, with dollar sales up 3%. This performance was driven by a decrease in average pricing, as units sold grew faster – indicating that consumers are increasingly favoring lower-priced skin care product in prestige outlets.

The prestige hair category continues to shine, with dollar sales up 8% through September and units also growing. Hair wellness products, such as heat protectants and scalp care, experienced notable growth and outpaced the overall category. Hair styling was the fastest-growing segment, and also the largest contributor to the category’s sales gains. Compared to all beauty categories, the e-commerce channel is heaviest within the hair market, with over half of department store and specialty sales stemming from online. Furthermore, with the majority of hair set sales stemming from e-commerce, it’s expected that online sales will be a particularly lucrative destination for holiday gift shopping.

Finally, prestige fragrance is the fastest-growing category thus far in 2024, as year-over-year sales soared by 14% in dollars and 12% in units through September. Higher fragrance concentrations played a crucial role in driving growth. Luxury brands experienced a 15% increase in sales, slightly faster than the overall market. In women’s fragrance, smaller sizes under 1 oz. grew at four-times the rate compared to other sizes, based on units sold. Looking ahead, the holiday season is expected to be especially important for the fragrance market, both in prestige and mass retail channels. Traditionally, the fourth quarter accounts for over 40% of annual sales in both channels. Early indicators in the third quarter align with forecasts for positive performance.