Amid retailers’ earlier-than-usual rollout of holiday promos, 29 percent of US consumers plan to spend more on holiday shopping than they did last year—despite unchanged feelings about their personal financial situation and the state of the economy. That’s according to a recent study from The NPD Group that tracks holiday purchase sentiment each year.
The research estimates that holiday spending will increase 3 percent during November and December, and 5 percent when including October and early January. Chief retail industry advisor for NPD, Marshal Cohen, says 2021 will be a “hybrid holiday year” that blends the return to celebration as usual with the new pandemic lifestyle. The behavior of store-only shoppers shifting to shopping both in stores and online will also contribute to the hybrid year.
Despite two-thirds of consumers saying they expect their 2021 holiday season to be more similar to last year’s than the pre-pandemic season, one-third of consumers plan to buy more gifts because they’ll be seeing family and friends over the holidays. Plus, nearly half (47 percent) expect to visit or host family and friends.
NPD also found that more Americans are looking forward to the holidays, with 32 percent less concerned about COVID than they were last year. In addition, 58 percent are more comfortable shopping in stores now that vaccines are widely available.
Consumers’ holiday budgets have increased, driven by consumers who plan to spend $1,000 or more. The biggest increase in holiday spending is expected in consumer technology and home products, which have also been among the most popular retail sales categories during the pandemic.
Fifty-one percent of consumers plan to start their holiday shopping before Thanksgiving, compared to 49 percent last year, according to NPD. Worried about supply chain issues, many retailers are already pushing holiday messaging, including Sephora, Target and Pottery Barn.
When asked how to respond to potential shortages, Robert Gerwig, senior vice president of distribution and logistics at Sweetwater, told RIS News:
“Update your customers on shortages and keep updating them regularly. By that, I don’t mean email blast your entire customer base and tell them you’re out of a product, but communicate one-to-one and let them know that your people are working hard every day to try and get them the products they have on order.”
Port delays are complicating the issue. An August report from the National Retail Federation and Hackett Associates estimated that US container ports would manage 2.37 million 20-foot containers in August, a 12.6 percent increase from last year and the highest number of containers imported in a month since the NRF started tracking imports in 2002. The NRF and Hackett Associates’ follow-up report in September expects 2.21 million containers, or about 5.1 percent growth from last year.