Jacquelyn Wenskus, Beauty Industry Analyst at Circana12.18.23
The holiday season is in full swing, and like many other shoppers I have fragrance on my list of gifts to buy for my loved ones. Keeping with tradition, fragrance continues to be a top gifted item among U.S. consumers, according to Circana, and gains the most share during the holiday season compared to other times of the year.
Despite a lackluster early holiday season performance across most discretionary retail categories this year, fragrance – and the prestige beauty market in its entirety – has prospered. Fragrance sales were off to a strong start in the fourth quarter (Q4), with dollar sales through December 2 up 12%, compared to 2022, and already almost on par with total Q4 sales generated in 2022. With the most productive weeks of the season yet to come, we can confidently expect that fragrance will outperform itself this quarter, pointing to a very happy holiday for the fragrance market in 2023.
Most fragrance shopping continues to occur in stores, where consumers can physically smell and experience the products. However, for the early 2023 holiday shopping period, consumers shifted their spending in favor of online shopping. In Q4 through December 2, online sales for prestige fragrance increased at nearly double the rate of brick-and-mortar sales. This channel shift was evident nearly every week, but to an even greater extent during the Thanksgiving and Cyber Monday weeks.
Coinciding with major gifting occasions, it is not surprising that gift sets are more prominent during these periods compared to the remainder of the year. During the early holiday season, sets drove approximately one-third of fragrance sales. Sets are not only highly giftable, but also offer a value for consumers and are anticipated to sell at elevated levels through the remainder of the season. Sales of juices, or traditional fragrance bottles, are also faring well and, unique to Q4, luxury fragrance brands are gaining more traction among consumers.
While fragrance sales are off to a strong holiday season start, the most critical weeks are still ahead of us. Last year, the three weeks leading up to Christmas accounted for 49% of Q4 fragrance sales. As the final week gets underway, it will be crucial for brands and retailers to win over consumers including myself, who will be in stores for the last-minute shopping rush.
Despite a lackluster early holiday season performance across most discretionary retail categories this year, fragrance – and the prestige beauty market in its entirety – has prospered. Fragrance sales were off to a strong start in the fourth quarter (Q4), with dollar sales through December 2 up 12%, compared to 2022, and already almost on par with total Q4 sales generated in 2022. With the most productive weeks of the season yet to come, we can confidently expect that fragrance will outperform itself this quarter, pointing to a very happy holiday for the fragrance market in 2023.
Most fragrance shopping continues to occur in stores, where consumers can physically smell and experience the products. However, for the early 2023 holiday shopping period, consumers shifted their spending in favor of online shopping. In Q4 through December 2, online sales for prestige fragrance increased at nearly double the rate of brick-and-mortar sales. This channel shift was evident nearly every week, but to an even greater extent during the Thanksgiving and Cyber Monday weeks.
Coinciding with major gifting occasions, it is not surprising that gift sets are more prominent during these periods compared to the remainder of the year. During the early holiday season, sets drove approximately one-third of fragrance sales. Sets are not only highly giftable, but also offer a value for consumers and are anticipated to sell at elevated levels through the remainder of the season. Sales of juices, or traditional fragrance bottles, are also faring well and, unique to Q4, luxury fragrance brands are gaining more traction among consumers.
While fragrance sales are off to a strong holiday season start, the most critical weeks are still ahead of us. Last year, the three weeks leading up to Christmas accounted for 49% of Q4 fragrance sales. As the final week gets underway, it will be crucial for brands and retailers to win over consumers including myself, who will be in stores for the last-minute shopping rush.
