Report: Practical Holiday Purchase Intentions to Drive Sales

Jacqueline Barba
Associate Editor, Path to Purchase Institute
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Consumers will look to splurge on their own needs and deal with the guilt of missing in-person celebrations this holiday season. This means the bigger ticket items that supported new at-home living and drove general merchandise sales since the COVID-19 pandemic began are likely to continue to stimulate holiday retail sales, according to market research company the NPD Group. NPD’s annual holiday purchase intentions study reveals that three in ten holiday shoppers are planning to spend more than last year because they have fewer expenses related to activities like dining out and travel. In addition, 40% of consumers indicated that, as a result of COVID-19, they will buy more gifts to bring joy during challenging times.

“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, in a press release. “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.”

Quarantine favorites related to virtual at-home lifestyles – like monitors, PC headsets, USB cameras, sleepwear, hair care, air fryers and soda machines – that have sustained growth month after month since March are likely to remain on consumer shopping lists. Early promotion winners from the week ending Oct. 17 (e.g. Amazon Prime Days, Target Deal Days, etc.) also indicate continued trends driving what will be hot for the holidays. Products like robotic vacuums, toy building sets, smart doorbells, fashion dolls and accessories, smart watches and fragrance sets have been primarily driven by innovation.

More than 40% of holiday shoppers will be shipping most of their gifts as people continue to take COVID-19 precautions, a factor that will prompt increased spending related to guilt-gifting and make way for gifts that are easier and less costly to ship. Gift cards will be a hotter commodity this year, with 53% of consumers planning to give them as holiday gifts, up from 45% last year. And while experiences are currently limited, there are some other intangible gifts that have elevated in popularity as a result of the pandemic. Food subscriptions had fallen in popularity over the past 2 years but gained traction this year, becoming the No. 1 type of planned subscription service gift, followed closely by streaming service subscriptions.

If there is pent-up demand for anything this holiday season, it is normalcy,” said Cohen. “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.”