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SurveysOct 14, 2016
NPD Group: Holiday Spending to Rise 3%
The firm joins a number of other companies predicting a happy holiday season for retailers in 2016.
The NPD Group’s holiday survey predicts growth among all consumer categories. “The lack of stand-out, must-have products this holiday season is benefiting the categories that are delivering on basic consumer wants, but marketers need to find new ways to engage and excite holiday shoppers to drive significant growth,” said NPD Chief Industry Analyst Marshal Cohen.
Port Washington, N.Y.--Global information company The NPD Group has joined a number of other firms in predicting that it will be a happy holiday season for retailers this year.
According to the company’s 2016 Holiday Purchase Intentions Survey, consumers plan to spend an average of $636 on holiday-related items, a 3 percent increase compared with what they planned last year.
The survey was conducted in September and polled 3,499 individuals ages 18 and older.
When their holiday spending plans were broken down more precisely, 14 percent of consumers indicated they plan on spending more than they did during the 2015 holiday season, and 17 percent say they’ll spend less. These numbers are basically the same as last year’s results, the NPD Group said.
Consumers also appear to be less concerned about the economy ahead of the holidays.
When the survey asked how the state of the economy will influence their holiday purchases this year, 12 percent said it will have a “significant impact,” which is a decrease from recent years’ results--14 percent said the same thing in 2015, while 19 percent said it in 2014.
“All signs point to a holiday retail season that will outperform last year’s,” said Marshal Cohen, chief industry analyst at The NPD Group. “The unvarying holiday spending intentions expressed by consumers are a sign that even this year’s intense election cycle has done little to dampen consumer confidence going into the holiday season, which we forecast to grow moderately.”
The NPD Group’s prediction is in line with that of the National Retail Federation, which said it expects U.S. retail sales in November and December (excluding autos, gas and restaurants) to increase nearly 4 percent year-over-year to $655.8 billion.
Deloitte also forecasts growth in the 4 percent range for November through January, while PricewaterhouseCoopers anticipates a sales increase that’s more than double that.
What and When They’ll Buy
Not surprisingly, the survey indicated that retailers that offer e-commerce stand to gain the most from the holiday season as consumers plan to do even more of their shopping online.
Still, growth is expected across the market, from online-only to specialty retailers, national chains, toy stores and more.
Growth also is expected across all product categories when it comes
to what consumers plan to buy as gifts, but leading the pack is clothing and accessories at 66 percent of shoppers. Entertainment followed at 47 percent, toys at 41 percent, and tech and electronics at 37 percent.
“Consumers are ready to spend this holiday season. However, more than ever before, how much they spend will be determined by their own perception of the products and promotions they are presented with, rather than the simple fact that the products and promotions are there,” Cohen said.
Two out of 10 shoppers already have started tackling their holiday gift lists, The NPD Group said, noting that how early, or how late, shoppers get started on their lists can be an indicator of how much they will spend throughout the season.
Earlier shopping generally correlates to spending more, though that doesn’t mean it is the cause of spending more, The NPD Group pointed out, as those with longer lists often feel the need to get started earlier.
Twenty-seven percent of “heavy spenders” (those who plan to spend $750 or more) have already started shopping. This dips to 24 percent among mid-level spenders (between $300 and $749) and 17 percent among low-level spenders (less than $300).
“Consumers are ready to spend this holiday season. However, more than ever before, how much they spend will be determined by their own perception of the products and promotions they are presented with, rather than the simple fact that the products and promotions are there,” Cohen said.
Two out of 10 shoppers already have started tackling their holiday gift lists, The NPD Group said, noting that how early, or how late, shoppers get started on their lists can be an indicator of how much they will spend throughout the season.
Earlier shopping generally correlates to spending more, though that doesn’t mean it is the cause of spending more, The NPD Group pointed out, as those with longer lists often feel the need to get started earlier.
Twenty-seven percent of “heavy spenders” (those who plan to spend $750 or more) have already started shopping. This dips to 24 percent among mid-level spenders (between $300 and $749) and 17 percent among low-level spenders (less than $300).
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