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Holiday 2009
Looks Back-to-the-Future
Thirty percent of consumers surveyed told NPD they plan to spend less this holiday, a four-point increase over last year’s results.
U.S. Consumers' Spending Intentions 2009 vs. 2008 | ||
| 2009 | 2008 | |
| Plan to Spend More | 11% | 11% |
| Plan to Spend About The Same | 59% | 63% |
| Plan to Spend Less | 30% | 26% |
| Source: The NPD Group/Annual Holiday Survey | ||
“That 4 percent increase is certainly a sign of the times. On the other hand, that 4 percent is not as dramatic as it could have been,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc. “I think consumers will be looking for the right gift, rather than the most extravagant or expensive one. That, combined with the soft numbers we are up against from holiday last year, means I think we will see growth, albeit a modest 0.5 to 1.5 percent,” he said.
It is this 0.5 to 1.5 percent growth that takes us “back to the future”, – to holidays past, when growth rates of 5 percent or more were unheard of and unexpected. For Holiday 2009, not only will actual spending levels go back to the future but the kinds of gifts consumers purchase will revert to more traditional holiday gift items.
“The survey results point to a return of more of sweaters, fragrances, music, books, movies, and wallets as gifts,” said Cohen. “We are also seeing makeup and TVs showing signs of growth. Other standouts are notebook and netbook computers. They have been growing and will continue to grow through the holiday.”
Top 10 Items Consumers Plan to Buy as a Gift 2009 vs. 2008 | |||
| 2009 | 2008 | ||
| 1 | Apparel | 49% | 49% |
| 2 | Toys | 34% | 37% |
| 3 | Movies (DVD, Blu-ray) |
29% | 29% |
| 4 | Books | 28% | 27% |
| 5 | Electronics (TVs, Home Theater Systems/DVD Players/Recorders, Home Audio Products, Satellite Radio, GPS Systems, Cell Phones, Desktop/Laptop Computers, Computer Peripherals, Digital & Video Cameras, MP3 Players) |
24% | 23% |
| 6 | Accessories (Bags, Small Personal Accessories, Watches) |
22% | 20% |
| 7 | Music | 21% | 20% |
| 8 | Video Games | 20% | 22% |
| 9 | Fragrances | 19% | 17% |
| 10 | Food | 18% | 17% |
| Source: The NPD Group, Inc./Annual Holiday Survey | |||
What’s on consumers’ holiday shopping lists?
While there has been no change in the top five categories, there is some movement in the bottom five categories. The survey results show some upward movement in consumer purchasing intentions for accessories, music, and fragrances. The number of consumers saying they will purchase those as gifts for holiday has shifted – accessories moved up one spot from seventh to sixth this year, music was up one spot from eighth to seventh, and fragrances moved up one spot to ninth this year.
For the electronics categories overall, the NPD Holiday Survey shows a 20 percent rise among 18- to 24-year-olds who said electronics are the gift to purchase this year.
“This age group is clearly demonstrating that they feel electronics are no longer a luxury, but are, in fact, a necessity,” said Cohen.
Apparel is also a bright spot. Last year 49 percent of consumers told NPD they intended to buy apparel as a gift; this year that number is holding at 49 percent. “That is good news for apparel,” Cohen said. “Its multi-year slip has stabilized this year.”
What will motivate consumers to purchase this holiday? The survey results point to value as a primary motivator this year. Sixty-two percent said value plays a big role in determining what and where they buy.
This was followed by “special sale” at 61 percent and “convenient location” at 50 percent.
The X-Mas X-Factor
Cohen also explained a number of variables that could contribute to the outcome of the 2009 holiday retail season. He calls this the “X-mas X-Factor.” Among these variables are:
X-Factor for timing
When will consumers begin their shopping? This year there was a 3 percent rise in the number of consumers saying they will begin their holiday shopping during the Thanksgiving weekend or later. The number of consumers who said they would begin their shopping in early December or at the last minute posted an eight percent increase. “The X-factor here points to a later start for this season’s shopping,” said Cohen.
X-Factor for the the economy’s impact on consumer spending
Almost 50 percent of consumers told NPD that the state of the economy will have a significant effect on their holiday spending. “Will the economy force the consumer to dip into savings or just cut down those on the list? Perhaps if you are an in-law, you might just find yourself getting a card rather than the gift this year,” said Cohen.
“Perhaps the biggest X-mas X-Factor is the overall state of U.S. consumers’ psyche,” Cohen said. “Will they be feeling frugal, or will they have a case of frugal fatigue and unleash some pent-up demand?”
What will consumers do this holiday season? Visit www.holidaymarketresearch.com to view all of our 2009 holiday market research and industry insight in one place.
To find out how NPD information and insights can help you anticipate holiday sales trends, contact Charles Camaroto at 866-444-1411 (contactnpd@npd.com).