NEW YORK — This holiday, the consumer will be king — and Christmas will be tough for retailers.
The convergence of several dynamics is compelling consumers to delay holiday shopping, as they hold out for the best sales promotions, plan to shift shopping expeditions increasingly to value-driven stores and expect to boost spending versus holiday 2001 by $60, or 10 percent, on average to $660, according to NPD’s new study, "Holiday Insights 2002."
"The consumer is in control — there is more supply of product than there is consumer demand," observed Marshal Cohen, co-president of NPDFashionworld, a Port Washington-based market researcher, in a preview of the survey results for WWD.
The biggest influence on holiday shoppers is their continuing quest for value, the mind-set underpinning their readiness to delay purchases and shop at mass merchants such as discount stores and warehouse clubs, Cohen said. Also cited as coloring consumers’ holiday purchasing plans are the quality and selection of merchandise, hassle-free returns, convenient store locations and a safe environment.
Adding to the holiday picture are the ailing economy; the overabundance of retail stores, and the absence of a single hot item, let alone a must-have piece of apparel. "There is no Sony PlayStation, X-Box, Cabbage Patch doll, or Air Jordan" emerging this year, Cohen commented.
"In the apparel category, jeans will still be big, but there will be no one style or brand that people will be clamoring for," he projected, when prompted. "I expect some of the classic styles will do well — traditional footwear, rugby shirts. Sweaters may be a bit better. Will jackets do better? No. They were a signature item a few years ago. People don’t need them now."
The biggest surprise in the numbers, Cohen said, was that 81 percent of those surveyed plan to spend the same or more this holiday, compared with a year ago. "I figured more like 40 percent would have said they’d spend the same or more," the market researcher noted. Among that 81 percent, 69 percent of the respondents plan to spend the same as in holiday 2001, while 12 percent are aiming to spend more. Another 19 percent plan to spend less. Upper-income earners, or those in households with average annual income of more than $75,000, anticipate they’ll spend $956, on average, or 45 percent more than the $660 benchmark. Lower-income consumers, or those in households with average annual income of less than $35,000, expect to spend $379 on average, or 43 percent less than the $660 level.Asked to explain the phenomenon, Cohen said, "People are still looking at holiday shopping as a way to feel better and to insulate loved ones from all the issues going on out there."The 18-to-24-year-old age group held the biggest share of consumers anticipating they’ll spend more this holiday, with 33 percent saying they will do so. They were followed by 25-to-34 year olds, among whom 19 percent said they’ll spend more; 35-to-44 year olds, 12 percent, and 45-to-54 year olds, 10 percent.
"The younger market is realizing that life’s too short," Cohen said, referring to their willingness to spend more this holiday. "They are not feeling as invincible as they did before 9/11," he stated, adding that this has probably sparked a desire to reward themselves and others with holiday gifts. As for the 45-to-54 year olds, the group with smallest share planning to spend more, Cohen reasoned, "They’re living lifestyles most affected by the economy, taxes. It’s not as much about giving as it is about preparing for the future," he said of their shopping budgets, which showed the smallest planned increase.
"Holiday Insights 2002" was fielded by NPD on Sept. 17 to 5,000 online panelists, ages 18 or older. The survey results are based on responses gleaned, in a few days, from approximately half that sample.