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Will it be Hesitation Holiday for consumers this year?
NPD Chief Industry Analyst Marshal Cohen says there’s opportunity in impulse purchasing
As retailers continue to push the start of the holiday season earlier and earlier, consumers tell NPD they don’t anticipate starting their shopping until later and later.
The recently-released results of NPD’s Annual Survey of Consumers’ Holiday Purchase Intentions 2007 show forty-one percent of respondents don’t anticipate beginning their holiday shopping until after Thanksgiving. That’s 10 percent more than reported in last year’s survey.
“I spotted the first holiday set-up in a store on August 18th this year – that’s nearly a month earlier than last year. Retailers are looking to start the season earlier, but consumers just aren’t ready,” said NPD’s Chief Industry Analyst Marshal Cohen. “The hesitation comes in because there isn’t that one must-have item, coupled with the fact that consumers are conditioned to expect deeper discounts as it gets later in the season. Where’s the incentive to shop early?”
There are plenty of questions about how the current state of the U.S. economy will affect holiday sales. According to the survey results, only 5 percent of consumers say they are actually planning to spend less this holiday.
Consumers' planned purchases by category are in line with last holiday's actual purchases in all categories but electronics. Stephen Baker, vice president of industry analysis for The NPD Group, is not concerned that these plans will translate to an actual drop in sales for the upcoming holiday season. "Electronics tend to be more big-ticket, family-oriented items and may not really be considered a gift by the consumer. Additionally, since the price point on many electronic items is higher, consumers anticipate purchasing fewer electronics items, but will actually end up spending a good deal of money in the electronics category."
| Consumer Spending Intentions | ||
| Category | Plan to Purchase '07 | Purchased '06 |
| Clothing | 54% | 59% |
| Electronics | 38% | 51% |
| Toys | 37% | 39% |
| Books | 33% | 32% |
| Music | 26% | 26% |
| Fragrances | 22% | 23% |
| (Percentage of survey respondents) | ||
Source: The NPD Group/Annual Survey of Consumers’ Holiday Purchase Intentions 2007
The holiday shopping season continues to be the most important one to retailers, and with expectations of lowering growth rates, could there be a missed opportunity somewhere? Cohen believes there is an opportunity being missed or not being properly identified: impulse purchasing.
Impulse purchasing happens when consumers purchase items for themselves, gifts for others not on their lists, or even extra gift items for people already on their lists – while they’re shopping.
“Impulse purchasing has made up a significant portion of holiday sales. In past years, impulse purchases have accounted for 26 percent of holiday sales. In 2006, that figure dropped to 19 percent; this year we’ll be lucky to hit 17 percent,” said Cohen. “Stores and brands need to reclaim and become the drivers of impulse. They need to identify or even create a hot product or products. Then they need to create a forum in which salespeople can be available to interact with customers, make recommendations, and turn the recommendations into sales.”
“Gift cards and online shopping are contributing to the decline of impulse purchasing,” Cohen said. “Plus, they do make it easy to shop for the holiday.” Thirty-nine percent of survey respondents told NPD they intend to buy gift cards. This year, 10 percent more of them reported they feel giving a gift card is an acceptable thing to do.
To learn more about how NPD products and services can factor into your holiday planning, contact Charlie Camaroto at 866-444-1411 (contactnpd@npd.com), or visit www.npd.com.