Happy Holidays Ahead For The Beauty Business?

Amid signs of increased optimism about their personal finances, 25% of US consumers plan to spend more on holiday shopping this year compared to 20% in 2013, and spending on holiday gifts is expected to average $718, according to Accenture’s annual holiday shopping survey.

Another major predictor, the National Retail Federation, announced in October, that it expects sales in November and December (excluding autos, gas and restaurant sales) to increase 4.1% to $616.9 billion, higher than 2013’s actual 3.1% increase during that same time frame.

According to NRF, holiday sales on average have grown 2.9% during the past 10 years, including 2014’s estimates, and are expected to represent approximately 19.2% of the retail industry’s annual sales of $3.2 trillion. This would mark the first time since 2011 that holiday sales would increase more than 4%, said the organization.

“Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the year and an uneventful summer,” said NRF president and CEO Matthew Shay. “While expectations for sales growth are upbeat, it goes without saying there still remains some uneasiness and anxiety among consumers when it comes to their purchase decisions. The lagging economic recovery, though improving, is still top of mind for many Americans.”

The Accenture survey found consumer enthusiasm for Black Friday shopping has reached its highest level in eight years, as 66% of respondents said they are likely to shop that day, compared to 55% who planned to do so in 2013 and 44% who said the same back in 2007. In addition, 37% plan to shop online during that period using a desktop, mobile device or tablet, up from 32% in 2013. Plans to shop on Thanksgiving Day and evening rose to 45% from 38% in 2013.

Free shipping is still the No. 1 incentive for buying holiday gifts online (69%), followed by finding products that are discounted compared to in-store prices (51%) and avoiding the crowds and long check-out lines (50%).

The Accenture Holiday Shopping Survey found that of those consumers planning to spend more this year, 28% said they have more discretionary income and 22% noted that they have greater job security, up from 15% in 2013. Additionally, consumers are planning to allocate a greater share of wallet to holiday shopping than in previous years. For example, of those planning to spend more this year, 47% plan to spend $250 or more compared to 40% in 2013. Of the 19% of consumers who plan to spend less this year, Accenture reported that 41% said they will reduce the amount they spend by less than $100.

According to NRF chief economist Jack Kleinhenz, in “the grand scheme of things, consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers; however, shoppers will still be deliberate with their purchases, while hunting for hard-to-pass-up bargains.” 

Accenture conducted an online survey using a representative sample of 500 US consumers in September 2014.