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NPD Group Forecast Profitable, But Bumpy Holiday Season
Sales for the upcoming holiday season will increase 2.7 percent over the 2018 holiday season, according to a recently released survey from market researchers The NPD Group, but the pace of the holiday season is going to feel like a roller-coaster ride. Expect big peaks and valleys in the 28 days of the official holiday sales season, which officially starts the night of Thanksgiving and ends on Christmas.
Released on Nov. 12, NPD’s “U.S. Holiday Purchase Intentions” survey predicted a good Black Friday weekend. The typical shopping lull in early December will be deep and protracted, but sales are expected to surge as the season comes to a close.
NPD surveyed 3,485 American consumers online in September. The survey asked questions regarding the amount of money that consumers predicted they will be spending this year as well as what they intend to buy. The survey also found that a good start to Black Friday will be followed by a mediocre Cyber Monday, which is typically marked by a surge in digital commerce. The survey said that growth in online sales has been plateauing. It also found that political events, such as the impeachment hearings in Washington, D.C., might take attention away from shopping.
Marshal Cohen, the author of the survey and the chief industry analyst for The NPD Group, said that retailers will have to work to gain consumers’ attention, even during a season devoted to shopping.
“Most consumers in the U.S. are looking forward to this holiday season and see the holidays as a break from everything happening in the world. Half even say going out shopping puts them in the holiday spirit,” Cohen wrote. “But almost as many say they would rather plan an outing with family or friends than exchange gifts. Consumers are faced with endless distractions, be they financial, political or social, many of which also function as purchase influencers that marketers need to understand and address.”
The average spend during the holidays is forecasted to be $740 compared to an average spend of $693 in the 2018 holiday season. It found that 20 percent of those surveyed planned to spend more compared to 18 percent who said that they intended to spend more during NPD’s 2018 U.S. Holiday Purchase Intentions survey.
But it also found that 64 percent of those surveyed planned to spend the same amount as they did in the 2018 holiday season. It also found that 16 percent planned to spend less. The categories forecasted to enjoy upticks in sales are tech/electronics and homewares. A dip is predicted for fashion sales. “[They’ll] spend more on less items,” Cohen said. However, the survey predicted that consumers will be willing to spend more on clothing items that they consider investments, expected to last for a long time.
The survey also asked questions regarding where consumers will spend their holiday budgets and ranked the top-ten destination sites. Expected to enjoy the most sales will be online-only sites. Following e-commerce sites will be this list’s number two–ranked retail destination site—mass/discount stores. The third-ranked destination site will be national chains. The number four–ranked shopping destination will be department stores, followed by clothing specialty stores. Off-price retailers are forecasted to be the eighth most popular shopping destination.
Other market research groups have forecasted that spending will be strong during the 2019 holiday season. There have been dips in consumer confidence during the past couple of months, according to Lynn Franco, senior director of economic indicators for The Conference Board.
“However, confidence levels remain high, and there are no indications that consumers will curtail their holiday spending,” she said.
