Even though the recession is technically over, lingering concerns are keeping consumers in a cautious frame of mind. We are seeing what I call 'calculated consumption.'
Port Washington, NY (Vocus) October 6, 2010
The NPD Group, Inc., a leading market research company, released the results of its ninth annual survey of consumers’ holiday spending intentions. The study’s results suggest that consumers will approach this holiday shopping season with care.
U.S. Consumers’ Spending Intentions, 2010 vs. 2009
Plan to Spend More 9% 11%
Plan to Spend About The Same 61% 59%
Plan to Spend Less 30% 30%
Source: The NPD Group, Inc./Annual Holiday Survey
The majority of consumers say they plan to spend about the same as last year, 61 percent this year, up 2 points from last year. About one-third of survey respondents say they plan to spend less, which is the same as last year; and only 9 percent say they plan to spend more, down 2 points from 2009.
“Even though the recession is technically over, lingering concerns are keeping consumers in a cautious frame of mind,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc. “We are seeing what I call ‘calculated consumption.’ and I believe that it is a consumer mind-set that will be around after holiday shopping is over.”
Evidence of consumers’ more thoughtful and cautious approach this holiday can be seen in the fact that 62 percent of consumers say they plan to do some kind of ‘homework’ prior to making a purchase. Almost 44 percent of consumers say they will comparison shop before they buy a gift. Thirty-seven percent say they will use ads or circulars to guide their gift shopping, and 33 percent say they will compare prices online before they shop in a store.
“What this means is consumers will be looking to find what to buy, when to buy, and where to buy before even leaving the house,” said Cohen. “This eliminates the rushed decisions and can potentially eliminate some impulse purchasing from the holiday shopping equation.”
The primary influence on where consumers will shop for gifts this year remains ‘price’ (60 percent). ‘Special sale price’ came in second with 58 percent, followed by ‘convenient location’ at almost 47 percent.
In almost every category this year, there is a drop-off in intended purchases.
Top 10 Items Consumers Plan to Buy as a Gift, 2010 vs. 2009
1 Clothing 42% 49%
2 Toys 32% 34%
3 Movies/DVDs 24% 29%
4 Books 23% 28%
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) 16% 24%
6 Accessories (Bags, Small Personal Accessories, Watches) 16% 22%
7 Video Gaming Systems or Video Games 15% 20%
8 Food 15% 18%
9 Music 14% 21%
10 Fragrances 13% 19%
Source: The NPD Group, Inc./Annual Holiday Survey
This year as in most of the past years, apparel is at the top of the list as the number one gift item to give, followed again by toys in the number two spot.
“In apparel, I think it is important to point out that the drop-off in intentions doesn’t necessarily mean a significant decline in apparel sales,” noted Cohen, “Consumers tend to fall back on their ‘old faithful’ items, like apparel, especially when there are no ‘new’ items or ‘hot’ categories. And so far there are only some updated re-runs of the same old product. These may be ‘want-to-have’ items, but there aren’t any ‘must have’ items, at least not yet.”
“Again, this year the real challenge is the absence of newness and excitement,” observed Cohen, “The more progressive brands will learn from mistakes of the recent past and ramp up the excitement in their product offerings. And in turn retailers will be looking for those products to ignite consumers’ passion to spend this holiday.”
Source: The NPD Holiday Survey of Consumer Purchase Intentions was fielded to members of NPD's online consumer panel from September 7th to September 15th, 2010. The survey was fielded to a U.S. representative sample; the findings presented here represent 2003 completed surveys. NPD maintains an online panel of nearly 2 million consumers that tell us about their shopping habits.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us Twitter at https://twitter.com/marshalcohen and https://twitter.com/npdfashion. Become a fan of Marshal Cohen at http://www.facebook.com/npdmarshalcohen and watch him on YouTube.
The NPD Group, Inc.
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