NPD: Consumers Plan to Spend Less This Winter Holiday Retail Season, Including Online

Ongoing concerns about the economy and inflation will negatively impact consumer spending in the upcoming winter retail season, according to new data from The NPD Group.

In the research group’s 2022 Holiday Retail Outlook, reflecting online survey results from 3,599 adult respondents, consumers plan to spend less on holiday shopping than they did in 2021, impacting most key categories. More consumers have negative perceptions of the economy and personal finances, the lowest seen in recent years, according to NPD.

Specifically, consumers plan to spend an average of $760 on holiday shopping this year. That’s higher than $691 in 2020, but below 2021 spending of $785.

Regardless, there’s good news for consumer electronics and entertainment categories. Both rank among the top 10 coveted consumer categories, with entertainment No. 4 generating $178 in mean individual consumer spending, trailing No. 1 consumer electronics with $765 in consumer spending.

Similar to other consumer surveys, most respondents will begin their winter holiday shopping over the Thanksgiving weekend, with Black Friday (Nov. 25) is still the top time for finding the best deals, followed closely by pre-November dates such as Amazon’s just concluded Prime Day promotion.

Notably, NPD contends that online shopping will see its first major decline this holiday season. The research group found that 80% of respondents plan to engage in e-commerce, which is down from 85% in 2021, but equals pandemic-impacted 2020.

Despite rising prices on nearly all everyday expenses, the U.S. consumer continues to spend on general merchandise products, according to NPD. Through the first nine months of 2022, retail sales revenue was just 2% below the elevated 2021 levels and 17% above pre-pandemic 2019 results.

Year-to-date unit sales declined 8% compared with last year. However, consumers’ appetite for product appears to be normalizing with demand just 3% below 2019.

“Throughout 2022, we have witnessed the stretching of traditional retail shopping periods and a flattening of typical retail sales peaks,” Marshal Cohen, chief industry advisor for retail at The NPD Group, wrote in the report. “The consumer’s here-and-now shopping mindset adopted during the pandemic, combined with enduring and expanding price elevation, has resulted in a careful prioritization of spending with a clear focus on needs.”

Samba TV: Consumers Not Reducing Winter Holiday Shopping Despite Economic Concerns

Samba TV Sept. 14 announced key findings from its 2022 Holiday Report conducted in tandem with global research firm HarrisX. The survey of more than 2,500 U.S. adults who plan to shop for the holidays offers the first consumer-focused research of the holiday season detailing insights into shifting shopping preferences and significant challenges for advertisers seeking to engage shoppers this holiday season.

“Consumers are in the midst of a multi-year evolution transforming both how they shop and how they consume content,” Ashwin Navin, co-founder/CEO of Samba TV, said in a statement.

Navin said ongoing inflation concerns underscore a complex economic outlook and the most fragmented consumer engagement landscape in history, and we are on par to see one of the most unique holiday shopping seasons in recent memory.

“With Americans continuing to embrace a ‘return to normalcy,’ retailers will see trends like a return to in-person shopping emerge fueling the holiday season with overall spending behaviors on par with previous years,” he said.

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According to the report, about 74% of U.S. adults plan to spend the same or more money this year on holiday shopping as they did last year. The average adult plans to spend $1,041 this holiday season on purchases. About 83% of millennials plan to spend the same or more money this year on holiday shopping. However, due to inflation and the rising price of goods, almost half of consumers (47%) say they might actually pair down holiday shopping and purchase fewer gifts.

“Take note of younger consumers this holiday season,” Dritan Nesho, CEO of HarrisX, said in a statement. “Gen Zers are planning to splurge on their significant others spending more than $100 more than the typical U.S. adult. Gen Zers are also planning to lean into electronics in a big way, leading in smartphone, tablet and PC purchases.”

Samba found that 31% of U.S. adults plan to do most or all of their shopping in-store this holiday season — a significant increase from years past. More than one in four (28%) plan to increase in-store shopping this year compared to last year.

Just 24% now plan to do all or most of their shopping online. This is a shift from the past few years where COVID-19 concerns fueled a strong shift away from in-story to online.

In-store shoppers are planning to spend more than online shoppers, with the average person planning to do the majority of their holiday shopping in-store expecting to spend $1,286 this holiday season and the average majority online shopper planning to spend $853.

The report found that 21% of adults reported starting their holiday shopping before Labor Day. Parents are leading the early shopping charge with 1 in 4 (25%) starting before September.

“Consumers are balancing economic concerns with a deep desire for a return to normalcy this holiday season. Because nothing signals a return to holiday norms for many better than grabbing a pumpkin spice latte while shopping the gift aisles of the local mall this year, we expect to see a measurable increase of in-store purchasing compared to last year,” Navin said.

The 2022 Holiday Report finds that less than half of U.S. adults have a traditional linear TV subscription (48%). With more than half of all consumers now totally unreachable by traditional television campaigns, advertisers will need to lean into new methods to reach a majority of holiday shoppers this year.

The shift to streaming has become nearly universal, with new technologies such as voice assistants and direct-from-TV purchasing emerging as trends to watch this year, particularly among younger generations. In the study, 21% of millennials reported making purchases directly through their TV and 1 in 3 (34%) have clicked a QR code from a TV commercial to make a purchase.

More than 1 in 3 (38%) of U.S. adults report shopping online while watching streaming content, highlighting the need for smart cross-screen connected campaigns to reach consumers across every screen. Moms are the ultimate multitaskers recording the highest online shop activity while streaming (43%).

“Brands and advertisers are navigating the most fragmented consumer landscape we have ever seen,” Navin said. “Half of U.S. adults report that they no longer have access to a linear television subscription. These shoppers are poised to spend hundreds of billions of dollars on holiday gifts and yet will be completely unreachable by any traditional TV campaign. The shift to streaming has become ubiquitous across every age group with new technologies such as voice assistants and direct-from-TV purchasing emerging as trends to watch this year and into the future.”

Mastercard: Winter Holiday Retail Sales Up 8.5%

It was a resurgent season for retailers as consumers in the period from Nov. 1 through Dec. 24 increased their holiday spending 8.5% compared with the previous-year period, according to new preliminary data from Mastercard. Online sales grew 11%. Retail store traffic increased 8.1%.

“Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves,” Steve Sadove, senior advisor for Mastercard, said in a statement.

Continuing a key trend from 2020, consumers shopped earlier than in years past, as retailers offered special promotions early and then again later in the season as shoppers raced to secure “guaranteed by Christmas” shipping offers. Looking at Mastercard’s expanded holiday season, total retail sales were up 8.6% year-over-year for the 75 days between Oct. 11 and Dec. 24.

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The Thanksgiving weekend remained key, with Black Friday (Nov. 26) again the top spending day of the 2021 holiday season. For the Thanksgiving weekend, U.S. retail sales increased 14.1%. In-store sales also rebounded, increasing 16.5%, while e-commerce sales increased 4.9%.

E-commerce made up 20.9% of total retail sales, up from 20.6% in 2020 and 14.6% in 2019. The channel continues to experience elevated growth as consumers enjoy the ease of holiday browsing and buying in the comfort of their own homes.

 

U.S. Holiday Retail Sales

  Traditional Holiday Period

Nov. 1 – Dec. 24

  2021 vs. 2020 2021 vs. 2019
Total retail (ex. auto) +8.5% +10.7%
In-store +8.1% +2.4%
E-commerce sales +11.0% +61.4%
  2021 vs. 2020 2021 vs. 2019
Apparel +47.3% +29.0%
Department Stores +21.2% +11.0%
Electronics +16.2% +19.8%
Jewelry +32.0% +26.2%
Source: Mastercard measures overall retail sales across all payment types, including cash and check.

Samba TV: Amazon Focuses Christmas Ad Spending on Hispanic Market

The winter holidays typically offer an avalanche of television ads featuring most major retail brands. This year, e-commerce behemoth Amazon is targeting the majority of its Christmas marketing toward the Hispanic market.

New data from Samba TV finds that Amazon served a whopping 1.5 billion TV impressions this holiday season, about 590 million more than any of the other brands surveyed. Following the major broadcast networks, the three networks Amazon aired the most ads were Univision, Telemundo and UniMás.

Samba TV tracks more than 46 million opted-in televisions globally, including 28 million in the U.S.

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Amazon isn’t alone targeting Hispanic consumers. Samba found that of the Top 10 brands surveyed based on impression volume, eight ran ads on Spanish-language networks. In fact, Telemundo was the network that aired the most ads for Old Navy, while Univision took the top spot for DoorDash, and UniMás for Coca-Cola.

Amazon and McDonalds are doing the best job targeting consumers that don’t predominantly watch broadcast television. Samba said Amazon served 21% of its holiday market reach to light TV viewers, while McDonalds served 16% to that group. Comparatively, other brands’ reach among light TV viewers from 3% to 15%.

Regardless, most holiday TV ads are reaching households that watch a lot of linear, with cord-cutters and light TV viewers much less likely to be exposed. Each advertiser included within the Samba analysis reached mostly heavy and medium linear TV viewers with their ads.

None of the brands served more than 21% of their reach to light TV viewers, defined as the bottom 45% of linear-TV viewers within Samba’s panel based on time spent watching.

Consumers Projected to Spend More, Shop Early for Winter Holidays

With the winter holiday retail season officially open, new data from Citi Research finds that 23% of survey respondents said they would spend “somewhat more” on winter holiday items than they did in 2020. That’s up from 17% of respondents who said they would spend more in last year’s survey.

The 2021 online survey of more than 2,500 U.S. consumers found that individual spending would increase about 5% to $537, from $510. About 4% of respondents said they would begin shopping earlier this year than they did last year.

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“This is a good sign for retailers, who would prefer seeing early shopping rather than shoppers come in for last minute deals in late December,” analysts Paul Lejuez and Steven Zaccone wrote in a note.

A previous report from the National Retail Federation found that this year’s holiday spending had the potential to shatter previous records, with sales during November and December projected to grow between 8.5% and 10.5% over 2020 to between $843.4 billion and $859 billion.

The numbers, which excluded automobile dealers, gasoline stations and restaurants, compared with a previous high of 8.2% in 2020 to $777.3 billion and an average increase of 4.4% over the past five years.

GameStop Reports Winter Holiday Sales Boost Despite Pandemic, New Gaming Console Shortages

GameStop reported that worldwide sales results for the nine-week holiday period ended Jan. 2 reflected a 4.8% increase in comparable store sales and a 309% increase in e-commerce sales. Total sales declined 3.1% driven by an 11% decrease in the company’s store base due to a planned “de-densification” strategy, temporary store closures around the world due to pandemic-related government mandates and lower store traffic, particularly later in December, due to the significant impacts of COVID-19.

Total comparable store sales increased 4.8% compared with last year and reflected a 29.6% sequential improvement from the third quarter of fiscal 2020.  The positive results were adversely impacted in the high single-digit to low double-digit percentage point range, as a result of a significant reduction in consumer traffic related to the increase in COVID-19 cases.

Net sales were $1.77 billion, a 3.1% decrease compared to 2019, as strong console demand for PlayStation 5 and Xbox Series X and Series S systems was offset by store closures mandated by local governments due to COVID-19, and industry-wide limited supply of new gaming consoles, and supply chain constraints broadly.

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E-commerce sales, which are included in comparable store sales, rose 309% and represented approximately 34% of total company sales, with total worldwide online sales year to date reaching over $1.35 billion, far exceeding management’s $1 billion growth objective.

Regional sales in Australia and New Zealand, where the GameStop’s operations were materially less impacted by the effects of the pandemic, total comparable sales for the nine-week period increased approximately 31%, outperforming the other operating regions.

“Demand for the new generation of consoles remains very strong, and as a result, we anticipate the consumer’s excitement for the new console technology will benefit us going forward well through 2021,” CEO George Sherman said in a statement.

GameStop’s current fourth quarter ends Jan. 30.

Record Online Sales Drive 2019 Winter Holiday Retail Results Up 3.4%

With a six-days-shorter winter holiday period this year compared to 2018, retailers pushed earlier discount pricing in stores and online, which resulted in record e-commerce sales and a 3.4% increase in overall consumer spending (excluding autos), according to new data from Mastercard.

Online transactions increased nearly 19% from a year ago and accounted for nearly 15% of overall sales for the period from Nov. 1 through Dec. 24.

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“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” Steve Sadove, senior advisor for Mastercard and former CEO of Saks, said in a statement. “Due to a later-than-usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”

Department stores saw overall sales decline 1.8% and online sales growth of 6.9%, emphasizing the importance of omnichannel offerings. Electronics and appliances were up 4.6%, while the home furniture and furnishings category grew 1.3%.

E-commerce continues to drive retail, accounting for 15.4% of Black Friday (Nov. 28) and 24.5% of Cyber Monday (Dec. 1) consumer spending, respectively.

Top online retailers included Walmart, Amazon and Target — all drivers of packaged-media (including DVD/Blu-ray Disc) sales.

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Amazon Touts Record Holiday Retail Season

Amazon Dec. 26 announced a record-breaking holiday season, with more items ordered worldwide than ever before. The e-commerce behemoth said consumers shopped at record levels from a wide selection of products across every department. Best-selling products this season included, all-new Echo Dot home speakers and Bose wireless headphones, among others.

“This season was our best yet. We are thrilled that in the U.S. alone, more than one billion items shipped for free this holiday with Prime,” Jeff Wilke, CEO worldwide consumer, said in a statement.

Among retail highlights:

  • Customers purchased millions more Amazon Devices this holiday season compared to last year – the best-selling Amazon Devices this holiday included all-new Echo Dot, Fire TV Stick 4K with all-new Alexa Voice Remote, and Echo.
  • It was a record holiday season for Amazon’s Kids Edition devices; customers purchased more Echo Dot Kids Edition and Fire Kids Edition tablets than ever before.
  • Customers purchased millions of Amazon Fire TV, Fire Tablet, and Kindle products this holiday season.
  • Ring and Blink sold more devices this holiday season than ever before, as more and more customers are keeping their homes safe.
  • Customers made their homes even smarter this year with a record number of smart home devices sold on com; best-selling smart home devices included Amazon Smart Plug, Ring Video Doorbell 2, TP-Link Kasa Smart Plug Mini Outlet, and the iRobot Roomba 690.
  • Customers used Alexa to listen to hundreds of millions more hours of music this holiday season compared to last holiday season, and on even more services – including Amazon Music, Spotify, Tidal, and Apple Music, among others.
  • Customers asked Alexa to turn on their holiday lights tens of millions of times this holiday season, with the number one request being “Alexa, turn on the Christmas tree.”
  • Alexa delivered 8x as many reminders this holiday season compared to last.
  • Alexa set more than one hundred million timers this holiday season.
  • Customers requested nearly 3x as many recipes this holiday season compared to last and asked Alexa for cooking-related advice twice as much.
  • Alexa helped mix hundreds of thousands of cocktails this holiday season – with eggnog and Moscow Mule being the most requested drinks.
  • From carolers to delivery drivers and holiday guests, customers received millions of doorbell and motion announcements via Alexa this holiday season.
  • Customers were in to the festive spirit with Alexa Skill Blueprints – popular Blueprints this holiday season were The Holiday Story, Santa’s Letter, and the Hallmark Holiday Greeting.
  • The number one holiday song that customers requested this holiday season was “All I Want for Christmas is You” by Mariah Carey.
  • This holiday season, customers listened to more than one million holiday stories from Amazon Storytime on Alexa – the most popular holiday story was Rapping Paper.
  • Customers around the world asked Alexa how many days or sleeps until Christmas this holiday season – customers in the United Kingdom were the most excited, asking twice as much as customers in any other country.
  • Customers used Alexa nearly twice as much on Fire TV devices this holiday season compared to the same time period last year.
  • The best-selling electronics this holiday season included Bose QuietComfort 35 (Series II) Wireless Headphones, the Samsung Flat 65″ 4K UHD 8 Series Smart LED TV, Apple iPad (Wi-Fi, 32GB) in Space Gray, Wemo Mini Smart Plug, Blue Yeti USB Microphone in Blackout, Wyze Cam 1080p HD Indoor Wireless Smart Home Camera, and HP Sprocket Photo Paper.
  • The best-selling items at Amazon Books this holiday season included Becomingby Michelle Obama, Diary of a Wimpy Kid #13: Meltdown by Jeff Kinney, Sapiens: A Brief History of Humankind by Yuval Noah Harari, Kindle Paperwhite, all-new Echo Dot, and the L.O.L. Surprise! Bling Series toys.