Practical Splurges to Drive Holiday Sales

Shoppers will seek upgrades, innovation and quarantine favorites.

November 11, 2020

PORT WASHINGTON, N.Y.—Consumers will look to splurge on their own needs to deal with the guilt of missing in-person celebrations this holiday season. This means the bigger ticket items that supported new homebound living and drove general merchandise sales since the pandemic began are likely to continue to stimulate holiday retail sales, reports The NPD Group.

Its annual holiday purchase intentions study reveals that three in 10 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 for 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.”

Quarantine favorites related to our 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 must-have lists. Early promotion winners from the week ended October 17 also provide an indicator of 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 because they won’t be seeing family and friends as a result of 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.

“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.”

Retailers looking to capitalize on the upcoming holidays should be sure to watch “A Guide to Capitalizing on Key Consumer Moments,” an education session part of the NACS Crack the Code Experience, which runs through December 4. Register now and get access to these sessions, along with 50+ education sessions, virtual showrooms and online networking within the convenience and fuel retailing industries.