A survey of holiday buying intentions by The NPD Group reveals that consumers intend to spend slightly more this holiday season than last, despite recent issues such as rising gas and oil prices. Holiday shoppers plan to give to good causes this year, shop primarily at discount stores, spend the most on clothing and toys, and comparision shop before buying. According to the survey, holiday consumers plan to spend $681 this holiday season versus $655 last year.
Giving to Good Causes
"Holiday 2005 will be remembered as the year of giving to those in need," said Marshal Cohen, chief industry analyst, The NPD Group. "This holiday we will see more individuals giving to the needy and buying products where the proceeds go to charities," said Cohen.
However, consumers' desire to give could be impacted by factors outside of their control. Twenty-four percent of consumers surveyed said the price of gas and oil will have a great impact on how much they will spend on gifts during the holiday season. Thirty-one percent said gas and oil prices will have very little impact. And boding well for retailers, 34 percent of consumers surveyed said the price of gas and oil will have no impact on their holiday spending.
Top Holiday Spending Categories
The survey shows consumers once again will spend the most money on clothing, toys, movies (DVD and VHS), consumer electronics and technology and books, in that order. "This holiday season, we expect consumers to increase their spending on beauty products such as fragrance, skincare and makeup; sports equipment; apparel; footwear; computer peripherals; and video games," said Cohen. "Consumers are very aware that prices have come down in computers and they intend to purchase about the same number or more of them as last year, without spending as much."
Gift Cards
Gift cards will continue to play a key role this holiday season, with nearly 40 percent of consumers telling NPD they will buy a gift card or gift certificate. There is a good chance that number will grow since another 42 percent of consumers say they are undecided about whether they will purchase gift cards this year. According to last year's survey results, 36 percent of consumers told NPD they would purchase a gift card, while 49 percent actually did.
Value, Price and Holiday Shopping Destinations
It is no surprise that value and price continue to be important factors when it comes to where consumers go to shop for their holiday gifts. Sixty-seven percent of respondents said they will shop at discount stores such as Target and Wal-Mart, followed by 39 percent who say they will shop at national chain stores such as Sears and JC Penney. Thirty-seven percent expect to shop online, 31 percent at toy stores and 29 percent at electronic stores, beating out Warehouse clubs this year (including Costco and Sam’s Club) at 27 percent.
Other Key Influences on Holiday Consumer Shopping
- 51 percent of consumers say they comparison-shop before they buy a gift
- 48 percent prefer to buy special gifts the recipients wouldn't buy themselves
- 43 percent use ads and circulars to guide their gift shopping
- 37 percent think it is nicer to give a gift than a gift card or gift certificate
- 32 percent plan to buy their holiday gifts on sale
- 27 percent say they will pay more for the perfect gift
Holiday Shopping Season
When NPD asked consumers when will they begin their holiday shopping, 45 percent said they will start before Thanksgiving and 41 percent say they will be finished with their holiday shopping by early December. Thirty-two percent will wait until the last minute. "Retailers will continue to try to expand the holiday selling season by pushing holiday earlier and consumers will likely wait a bit longer to shop than retailers hope for," said Cohen.
"The added dynamic this holiday for consumers will be the higher fuel prices and higher heating expenses we're seeing in the market now. Despite these challenges, retailers will fare well this holiday season and consumers will not let these distractions spoil their holiday shopping spirit," Cohen said.