Retail sales are expected to post gains of between 3 and 5%, with 29% of US consumers saying they’ll spend more this holiday season than in years past.
“It’s going to be a hybrid holiday this year, blending the return of a celebratory feeling with the now normalized pandemic lifestyle,” said Marshal Cohen, chief retail industry advisor for NPD Group. “We expect the consumer’s sustained propensity to spend will carry through the traditional November and December shopping period. However, shopping in the here-and-now, and other spending styles that have emerged during the pandemic will bring additional growth to the expanded October-into-January shopping season this year.”
NPD predicts holiday spending will be up 3% during November and December, and 5% when the season expands to include October and early January. Responses to NPD’s recent holiday purchase intentions study show that while two-thirds of those polled say their 2021 holiday shopping season will be more like last year’s than pre-pandemic seasons, overall consumers are more optimistic than they were in 2020.
One-third of consumers plan to buy more gifts because they’ll be seeing friends and family during the holiday season, and nearly half say they’ll visit or host family. Six out of 10 consumers are more comfortable shopping in-stores, about 32% say they are less concerned about COVID-19 than they were last year.
More than half of those polled say they will start holiday shopping earlier, before Thanksgiving, with the biggest increase in spending expected for consumer technology and home products.
“New optimism, along with underlying uncertainty, are fueling shopping expectations, making this a more complex holiday season for consumers and marketers, alike,” Cohen said. “But retailers and manufacturers that remain flexible will be able to navigate the diverse landscape of consumer behavior and arrive at a successful holiday result.”
Online shopping also remains a strong driver of retail’s growth over the past few months. Since March 2020, the average amount spent each month per shopping trip has been between 13% and 29% higher than the same month in the prior year, according to NPD Group data released in September. The increase is partially due to a general shift toward online purchasing, where average selling prices and the amount spent on each transaction already tended to be higher, the survey said.