Consumers plan to spend an average of $636 on holiday-related expenses, up 3 percent from what they anticipated last year, according to The NPD Group’s 2016 Holiday Purchase Intentions Survey.
When questioned more broadly, 14 percent of consumers plan to spend “more” than they did during last year’s holiday season and 17 percent said they’ll spend “less” — virtually unchanged from 2015 results. When asked how the state of the economy will influence their holiday purchases in 2016, the 12 percent that said it will have a “significant impact” is down from recent years (14 percent in 2015, 19 percent 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 online survey of holiday purchase intentions was fielded in September among a U.S. representative sample of NPD online consumer panel members. The survey was completed by 3,499 individuals aged 18 and over.
NPD noted that sometimes the best intentions aren’t realized. During the 2015 holiday season, 16 percent of consumers said they planned to cut back during the 2015 holiday season, but more than 20 percent of consumers said that they actually spent more than they’d planned to on their holiday purchases.
The company also found that some people may be more determined than others to keep their spending in check this year, especially those who are still dealing with the “ghosts of holiday purchases past.” More than half (57 percent) of consumers used credit cards for at least some of their holiday season purchases last year, of whom 22 percent still have at least some of that debt hanging over them. In the end, over a quarter of those still paying for their last year’s holiday purchases say they’ll spend less on holiday 2016.
According to NPD, retailers with online purchase channels stand to gain, as consumers plan on shopping more through online channels this year. On average, shoppers plan on doing 38 percent of their holiday shopping online (up from 33 percent last year and 29 percent in 2014). Asked where specifically they plan to shop this holiday season, growth is apparent across the marketplace from online-only “e-tailers” to toy stores to specialty retailers in the beauty category, NPD found. The top five channels where they intend to shop were, in order, online only retailers (i.e., Amazon and eBay); mass merchandisers/discount stores; national chains; department stores, and toy stores.
When asked what they plan to buy this holiday season, the leading categories, in order, were clothing, entertainment, toys, tech/electronics, beauty, home, food/beverage and liquor/wine. Though outlooks vary among individual products, aggregated “supercategories” all show rising interest. Some 66 percent of consumers plan to buy clothing/accessories as holiday gifts this year, up from 63 percent last year.
“Consumer response is suggesting growth across retail channels, despite the growth and dominance of online shopping, which points to a season of optimism,” said Cohen. “The lack of standout, 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.”
Two in 10 consumers have already started their holiday shopping. Earlier shopping correlates with bigger spending. Twenty-seven percent of heavy spenders (those planning to spend $750 or more) have already started shopping; this drops to 24 percent among midlevel spenders ($300-$749) and 17 percent among low spenders (under $300). Those with longer lists are more likely to feel a need to get an early start.
Early shoppers are more likely to say they comparison shop before they buy gifts (45 percent versus 30 percent of late shoppers) and that they plan on buying all their holiday gifts on sale (38 percent versus 21 percent of late shoppers).
Late shoppers are less likely than their early shopper counterparts to pick up something for themselves when shopping for others (15 percent versus 26 percent of early shoppers).
Finally, six in 10 consumers are looking forward to the holiday season, and nearly half say the simple act of going out shopping during the holidays puts them in the holiday spirit.
“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,” said Cohen.