Despite the economic pressures, beauty has proven remarkably resilient. The category posted strong sales in the first nine months of the year, with prestige and mass beauty growing in dollars and units to land at $24.1 billion and $54.5 billion, respectively, from January through September, according to Circana. The market research firm estimates about one-third of consumers are planning to gift beauty products this year, “a meaningful increase from last year,” notes Larissa Jensen, global beauty industry advisor at Circana.

“The momentum is especially strong among higher-income households and those with children, millennials and gen Z, who are not only buying for others, but also indulging in self-gifting,” she elaborates in a blog post. “These groups are more likely to associate holiday shopping with bringing joy or practicing self-care, signaling a prime opportunity for beauty brands and retailers to craft messaging that celebrates both giving and personal wellness.”

Data from consumer intelligence firm NielsenIQ supports beauty shoppers’ preoccupation with self-care this holiday season. Nearly 48% of shoppers report that self-care merchandise is on their holiday list this year, rivaling clothes and entertainment.

“This holiday season consumers are redefining what value means. A serum that multitasks. A mass mascara that performs like prestige. A regimen that fits both mood and budget,” writes Jacqueline Flam Stokes, managing director of beauty and health at NielsenIQ, in a LinkedIn newsletter called “Beauty Acuity.” “Beauty brands must balance value and aspiration more carefully than ever. Shoppers still want beauty that tells a story, but they want to feel smart about it. The winning brands will create affordable moments of luxury that do not require trade-offs.”

American consumers have plenty of reasons to seek self-care. Consumer sentiment dropped to a six-month low last month, with the confidence index tracked by The Conference Board falling to 94.6 from 95.6 in September. The decline was especially pronounced in younger consumers under the age of 35 and those above 55 making an annual income of less than $75,000. Higher-income consumers earning more than $200,000 a year are more positive.

The longest government shutdown in history, which ended Nov. 12 after 43 days, left millions of federal workers without pay and threatened Supplemental Nutrition Assistance Program (SNAP) benefits for over 42 million people. It also was a drag on consumer activity. Low-income households represent between 9% and 15% of beauty shoppers at the industry’s top retailers, according to NielsenIQ.

While shoppers may be generous with beauty gifts, they’re expected to pull back elsewhere. Trade organization The National Retail Federation (NRF) forecasts November’s and December’s retail sales to increase between 3.7% and 4.2% from last year to reach $1.01 trillion to $1.02 trillion. Holiday sales in 2024 rose 4.3% to reach $976.1 billion.

Per person, consumer spending is predicted to be down slightly from last year. According to a consumer survey conducted by Prosper Insights & Analytics on behalf of NRF of 8,200 adult shoppers, consumers anticipate spending $890.49 on holiday gifts, food and decorations this year, down 1.3% from $901.99 last year.

Financial and professional services firm Deloitte has a dimmer outlook, predicting that holiday sales will be up between 2.9% and 3.4% to $1.61 trillion to $1.62 trillion. In 2024, holiday retail sales increased 4.2%. PricewaterhouseCoopers figures that annual holiday spend will drop by about 5% this year, the largest drop recorded since 2020, with gen Z shoppers pulling back spending the most, by about 23%.

To shed light on how beauty brands are preparing for the difficult holiday shopping season, for the latest edition of our ongoing series posing questions related to indie beauty, we asked 15 brand founders and executives the following questions: How do you think your brand will perform this Black Friday/Cyber Monday? What’s your promotional strategy and have ongoing tariff pressures shifted them? Overall, are you feeling positive, negative or somewhere in between about this holiday season?