NPD: Guilt, Need Critical To Holiday Buying Trends

Consumers will look to splurge on their own needs and address the guilt of missing in-person celebrations this holiday season as they engage in their annual spending, according to The NPD Group annual holiday purchase intentions study.

As a result, bigger ticket items that support homebound living, and which have driven general merchandise sales since the COVID-19 pandemic began, are likely to continue stimulating holiday retail sales.

The annual study demonstrated that three in 10 holiday shoppers intend to spend more on gifts than last year because they are planning fewer expenses related to activities such as dining out and travel. In addition, 40% of consumers indicated that, in response to the challenges people have suffered due to the pandemic, they will buy more gifts in the hope of bringing some joy to challenging times.

Quarantine favorites related to at-home lifestyles, such as monitors, PC headsets, USB cameras, sleepwear, hair care, air fryers, and soda machines, have sustained home-sector growth since March and are likely to remain on consumer must-have lists for the gift-giving time frame. In addition, early promotion winners from the week ending October 17, which included Amazon Prime Days, Target Deal Days and other retail promotions, suggested that robotic vacuums, toy building sets, smart doorbells, fashion dolls and accessories, smart watches, and fragrance sets look to generate significant demand in the holiday season, NPD maintained.

In another response to the pandemic, more than 40% of shoppers will be shipping most of their gifts in the current holiday season, as getting together with family and friends will be limited due to COVID-19 precautions. The tendency is prompted at least in part by guilt-gifting but, functionally, it will skew choices toward presents that are easier and less costly to ship.

Among giving alternatives, gift cards will be a hotter commodity in the 2020 holidays, with 53% of consumers planning to purchase them as gifts, up from 45% last year. In addition, food subscriptions, which had slipped in popularity over the past two years, gained traction in 2020. In fact, they rate as the top planned subscription service gift for the current holiday season, followed closely by streaming service subscriptions.

“Splurges on both ‘guilt-gifting’ and self-gifting will be significant components of the consumer’s retail therapy during holiday 2020,” said Marshal Cohen, NPD’s chief industry advisor, retail. “While the emphasis will continue to be on items that are useful to the consumer’s new way of life, the holidays are likely to prompt upgrades to up the ante on many of those practical purchases.”

He added, “If there is pent-up demand for anything this holiday season, it is normalcy. This season’s gift giving will be reflective of the time in which we are living, and the needs that go along with that, but the opportunities for growth lie in the innovative options that help consumers create the holiday cheer they are craving.”