With new fragrance launches and festive gift sets on shelves, the holiday season is in full swing, and the fragrance market is poised to shine bright. It’s an exciting time of year for consumers, including myself, who look forward to giving gifts to loved ones (and perhaps treating myself along the way). Holiday spirit is in the air – with consumer sentiment and intentions related to the holiday shopping season improved compared to the past two years, according to Circana’s annual 2024 U.S. Holiday Purchase Intentions Report. More people plan to buy more gifts, and more people also plan to self-gift, which are all behaviors that bode well for beauty – especially fragrance, which is the industry’s fastest-growing category this year.
In accordance with tradition, fragrance ranks high on consumer shopping lists, with 18% planning to gift perfume or cologne. This figure is notably higher than other beauty categories including makeup and skincare and is an upward shift, with fragrances appearing on even more wish lists this year compared to previous years.
This holiday season, consumers will be enticed by new scent offerings while simultaneously seeking value through sets, discounts, gifts with purchases, and rewards. While consumer interest and engagement with scent has expanded overall, younger generations such as Gen Z and Gen Alpha have been gravitating to fragrances in droves. #PerfumeTok has played a large role in fueling this demand. Resonating with younger consumers, lower priced products such as body sprays and mini sizes will be top sellers this season. At the same time, higher priced luxury fragrances and stronger concentrations continue gaining popularity and we can expect this momentum to carry through the remainder of the year.
Across both prestige and mass outlets, the holiday season remains of particular importance to the fragrance category, with the fourth quarter representing over 40% of annual sales within each channel. However, fragrance remains dominated by prestige retail including beauty specialty and department stores, which is also the channel responsible for most of the growth. While fragrances sold in the mass market have been growing at a relatively softer rate based on dollar sales due to double-digit declines in units sold, the upward trajectory of the prestige fragrance market endures.
As my colleague Larissa Jensen recently said, “prestige beauty epitomizes the indulgence in little luxuries,” and what could be a better example than a beautiful little fragrance bottle or a new scent to offer a sensorial escape. Our fragrance market outlook remains positive to close out the year, much like the overall consumer sentiment this holiday season.
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