Ultimately, to capture consumers’ constrained spend, brands need to invest in storytelling that reinforces worth, Lindquist says. “That means highlighting craftsmanship, longevity or ingredient quality rather than relying solely on discounts.”
Bright spots
Beauty is a likely bright spot this season. Saunders says the category is slightly more insulated from the crunch, as at least some beauty purchases are seen as essential. “Many are quite purposeful and solve problems in things like skincare, and a lot of consumers still see beauty as a worthwhile indulgence,” he says. Lindquist agrees, adding that the entry-prestige segment is expected to outperform as consumers seek ‘small luxuries’ that deliver emotional lift without major spend. Fragrance will be a leader for gifting, he adds, as will lip and eye kits, as well as body care. “Hair and body care are also gaining traction as consumers trade across categories within beauty rather than out of it,” he adds.
By and large, beauty falls at a lower price point than fashion. As Elf Beauty CFO Mandy Fields told Vogue Business ahead of last week’s earnings call, shoppers often buy the company’s lower-ticket items as part of their holiday gifting. “We always say whether we put it in a kit or you put it in a kit, Elf is very giftable,” she said.
“Many are quite purposeful and solve problems in things like skincare, and a lot of consumers still see beauty as a worthwhile indulgence.”
Neil Saunders, managing director and retail analyst at GlobalData
“Beauty overall looks better positioned this season, while fashion will need sharper value storytelling and disciplined promotions to capture demand,” Lindquist adds.
When it comes to fashion GlobalData expects handbags and jewelry to do well, per the firm’s gifting surveys. Competitoor’s Catellani agrees on handbags, and adds denim to the mix of categories he expects to perform. Lindquist anticipates strong momentum in social-driven trends – especially in the accessories category. After all, over 55% of shoppers say they’re using at least one social platform for discovery (Instagram; TikTok; YouTube), up about 2% on last year.
Across the board, brands should keep gifting front of mind, experts say, as assortment discipline will be key this season. “For fashion, that means curating strong hero pieces and gifting capsules. For beauty, that means leaning into fragrance, limited editions, and entry-prestige formats that feel special but accessible,” Lindquist says. “The winners will be those that make the consumer feel both smart and inspired when they spend.”
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