Ultimately, brands need to invest in storytelling that reinforces value, Lundqvist says, to capture limited consumer spending. “This means highlighting craftsmanship, longevity or quality of ingredients rather than relying solely on discounts.”
Bright spots
Beauty is a potential bright spot this season. Sanders says the category is a bit more insulated from the crisis, because at least some beauty purchases are considered essential. “A lot of people put a lot of purpose and problem-solving into things like skincare, and a lot of consumers still see beauty as a worthwhile indulgence,” he says. Lundqvist agrees, adding that the entry-prestige segment is expected as consumers look for ‘small luxuries’ that provide an emotional lift without the big expense. She added that fragrance will be a guide to gifting, as will lip and eye kits as well as body care. “Hair and body care is also gaining traction as consumers trade within the beauty category instead,” she added.
By and large, beauty comes at a lower price than fashion. As explained by Elf Beauty CFO Mandy Fields Vogue Business Prior to last week’s earnings call, shoppers often bought a company’s lower-ticket items as part of a holiday gift. “We always say whether we put it in a kit or you put it in a kit, the elf is very gifted,” he said.
“Beauty overall looks to be better positioned this season, while fashion will need faster value storytelling and disciplined developments to capture demand,” Lundqvist added.
When it comes to fashion, Global Data expects handbags and jewelry to perform better, according to the firm’s gift survey. Competitors Catelliani agrees on handbags, adding denim to the categories they expect to perform. Lundqvist expects strong momentum in social-driven trends, particularly in the accessories category. After all, more than 55% of shoppers say they’re using at least one social platform (Instagram; TechTalk; YouTube) for discovery, up from about 22% last year.
Across the board, brands should keep gifting top of mind, as assortment discipline will be key this season, experts say. “For fashion, that means crafting strong hero pieces and gift capsules. For beauty, that means fragrances, limited editions, and entry-level looks that feel special but accessible,” says Lundqvist. “The winners will be those who feel both smart and affected when consumers spend.”
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