This week, I checked in with retail analysts to glean insights into the shopping trends and consumer behaviors likely to impact the upcoming holiday selling season. Additionally, an influx of new fragrance launches roll out, L’Oréal is awarded three new patents, and Ulta Beauty’s MUSE Accelerator program is back with industry mentors and a new sponsor.
Early holiday shopping projections show consumers will shop early, but spend less
With exactly two months until Christmas Eve, holiday sales projections are beginning to roll in.
“Overall, the outlook for the upcoming winter holiday season is cautiously optimistic, reflecting moderate gains,” said Brittany Steiger, principal retail and e-commerce analyst at Mintel market research firm. The firm predicts total retail sales growth of 3.1% in November and December.
These numbers are slightly higher than a survey released last week by Deloitte, a firm that provides audit, consulting, tax and advisory services to 90% of Fortune 500 companies. The firm forecasts 2.3-3.3% growth in holiday retail sales from November to January. This would make holiday sales growth the lowest since 2018. For context, holiday sales grew by 4.3% last year.
“The signs are there for more softness in 2024. However, we were saying the same thing about 2023 and consumers surprised us,” said Nikki Baird, vp of strategy and product at Aptos, a retail technology company serving beauty and fashion retail brands. “While consumer confidence has been low, consumer spending has stayed better than expected.”
That is, on Tuesday, The Commerce Department reported retail and food service sales in the U.S. were up 1.1% in July and up 0.1% in August, beating out predictions that sales would drop this summer.
Baird predicts three main shopping waves that brands and retailers should exploit with deals this holiday: October, timed to compete with Prime Days; November, timed to compete with Singles Day; and Black Friday Cyber Monday. “There’s also a fourth, technically, as you get close to Christmas. We call it ‘shipping cutoff in-store promos’ or ‘end of season markdowns,’” she said.
Mintel’s Steiger told Glossy that consumers will take a variety of strategies to manage their spending through these holiday rushes, such as turning to more budget-friendly retailers or reducing the volume of purchases for a more “quality over quantity” approach. Similarly, Baird noted that consumers plan to either spend less on gifts or spend on a fewer number of people this year.
Part of this strategy includes shopping early to secure the best deals: Thirty-four percent of holiday shoppers plan to shop a pre-season sales event, like Amazon’s Prime Days, this year, Steiger said. “We can expect rival sales events from competitors as we have in recent years.”
According to Mintel research provided by Steiger, 28% of holiday shoppers plan to do their shopping in October and early November, while 40% plan to complete the majority of their shopping before Thanksgiving.
Still, two wild cards — the timing of the November holidays and the Presidential election — could throw these predictions for a loop.
Thanksgiving falls late in November this year, pushing Cyber Monday into December, which leaves just three weeks of shopping before Christmas. This could allow for stressed consumers to recalibrate after the Presidential election, leading to higher overall holiday sales than expected, depending on the sentiment of the outcome.
“The later Cyber Week timing may offer an additional benefit this year [by] giving shoppers more time between the election and the holiday to plan ahead for their holiday shopping,” said Steiger.
Regardless, consumer sentiment about the economy will still drive part of the holiday shopping growth. More than half of consumers, or around 54%, agree that financial stress is making it hard to celebrate the way they would prefer, down two percentage points from last year. And 64% want to spend the least amount of money possible, Steiger found in her research.
Despite the popularity of online shopping, if current trends continue, brick-and-mortar could experience a boon. According to Placer.ai, a location analytics firm, indoor malls, open-air shopping centers and outlet malls all experienced year-over-year visit growth in May and June. Back-to-school shopping beat these numbers with the biggest year-over-year traffic increase so far this year: Visits to indoor malls were up 7.3% compared to August 2023, while outlet malls experienced 6.1% more visitors year-over-year and open-air shopping centers saw traffic jump 5.8%.
According to American transportation and logistics company Ryder’s 2024 e-commerce consumer study, brick-and-mortar shopping is consistently more appealing for consumers. In 2023, 40% of its study participants reported primarily shopping in-store. That number jumped to 61% this year, which has promoted brands to invest in the in-store experience.
According to a report by Glossy sister publication Modern Retail, retail space availability is at its lowest point in decades with retailers investing more in brick-and-mortar.
Even so, seasonal holiday hires are down, according to a report by Challenger, Gray & Christmas, an outplacement firm, provided exclusively to Reuters. Retailers are expected to add 44,000 fewer jobs, or around 520,000 new jobs in the final quarter of 2024.
However, early projections are just that, and many other leaders in this market, like the National Retail Federation, won’t release their holiday projections until next month.
“Gift-giving is still a meaningful tradition to a lot of people, and retailers should be thinking about how to reinforce those emotional connections,” Steiger said. “Winter holiday shopping is rarely a ‘one and done’ shopping experience — 38% of shoppers make multiple trips or orders throughout the season. … And after a stressful election season, people may be eager for a distraction and more positive perspectives.”
Executive moves:
- Malena Higuera has been appointed CEO of Noyz, the new fragrance brand from beauty incubator Beach House that’s sold at Ulta Beauty. Higuera’s CV includes L’Oréal and Urban Decay.
- Four-year-old social wellness club Remedy Place announced on Tuesday William Acevedo as the company’s new CEO. Acevedo’s CV includes cosmetic dermatology company Ever/Body and beauty professional booking company GlamSquad, as well as roles at The Limited and Zales. Acevedo will replace Hemik Patel, who joined Remedy Place in December.
News to know:
- L’Oréal was awarded three new patents, including one for peelable makeup-removing compositions, another for cosmetics with high amounts of ceramides and, finally, a makeup setting mousse.
- It’s been another big week for fragrance launches as the leading beauty category shows no signs of slowing. To wit: Dollar sales on fragrance were up 12% in the first half of the year versus the same period in 2023, according to Circana market research company. Standout launches from the past week include Ellis Brooklyn’s new Vanilla Sin hair and body mist, which will sell for $35 at Sephora; Coach’s Dreams Moonlight, a mix of citrus and floral notes available for $74 at Ulta Beauty; and Editions de Parfums Frédéric Malle, a scent crafted by master perfumer Dominique Ropion and available for $636 at department stores like Neiman Marcus. Aesop launched its 11th fragrance, Virēre Eau de Parfum, a mix of bergamot, fig and green tea that sells DTC for $160. Finally, Viktor&Rolf launched Spicebomb Dark Leather, which will sell for $140 at retailers like Sephora and Ulta Beauty.
- Spooky collaborations are rolling out this month ahead of Halloween. ColourPop is launching six products inspired by “Stranger Things,” while hair-color brand Splat has partnered with the film “Beetlejuice Beetlejuice” to launch limited-edition semi-permanent hair color in bold hues. Meanwhile, R.E.M. Beauty just announced a collection with “Wicked”, for which R.E.M. founder Ariana Grande is a lead.
- Ami Colé, the clean beauty brand that launched in 2021 and sells at Sephora, has taken on an undisclosed investment from L’Oréal’s BOLD venture capital arm.
- Private equity firm L Catterton’s Elevate Beauty, its early-stage beauty and wellness investment arm, has taken a minority investment in natural fragrance brand Vyrao.
- Ulta Beauty’s Muse Accelerator program is back for its third edition with eight early-stage brands participating. This year, the retailer also unveiled a new partnership with nonprofit The Fifteen Percent Pledge and a new cohort of mentors that include Bread CEO and founder Meava Heim, Fur co-founder Lillan Tung, and Cocokind founder and CEO Priscilla Tsai.
- Early growth equity firm Label Capital has made a €5 million minority investment in Spanish supplements brand IVB Wellness Lab, which launched in 2023.
Stat of the week:
In a consumer-focused study published on Wednesday, Mintel market research company found that 27% of survey participants do not believe humans have had an impact on climate change. It found that Chinese consumers are the most likely to believe in climate change, while U.S. consumers are the most skeptical. Other top concerns among consumers surveyed include air quality, water shortages and plastic pollution.
The study found that consumers, when presented with ways to reduce one’s carbon footprint, had the most faith in carbon capture technologies (72%), upcycled foods (64%) and genetically modified foods (63%).
In the headlines:
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Listen in:
Shontay Lundy, the founder of Black Girl Sunscreen, joins the Glossy Beauty Podcast to discuss the challenges of big-box retail, parents as the best influencers for the next generation and the opportunity to change cultural sun-care norms.
Need a Glossy recap?
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