NPD Group: Shoppers opting for experiential gifts this year
It’s all about the experience.
Many holiday shoppers plan to purchase “intangible” gifts this year. According to NPD’s 2017 Holiday Purchase Intentions Survey, purchase intent is down across many general merchandise categories, but consumers place a high value on experiences. Thirty-nine percent of U.S. consumers plan to purchase experiential gifts this holiday season, like wine tastings, concert tickets, and spa treatments. Of those consumers, the majority (48%) plan to purchase some sort of food/beverage experience.
“Giving an intangible gift, an experience, can be more personal and more memorable for the gift-recipient, and in many ways easier for the gift-giver, making them an ideal holiday gift solution for many consumers,” said Marshal Cohen, chief industry analysts, The NPD Group.
In addition to experiential gifts, subscription services are also on the radars of some consumers this year – 7% of shoppers plan to purchase a subscription box or service as a gift this holiday season. Similar to the top experiences, food subscriptions top the list among consumers with an eye on these types of gifts, followed by beverages, electronics, health/fitness, fashion, and beauty/grooming subscriptions.
The purchase intent for experiential gifts and subscription services this holiday season is strongest among Gen Z and Millennial holiday shoppers, as well as households with children, and annual incomes over $75,000. Similarly, gift cards, more common ‘intangible’ holiday gifts, are popular among higher income households and those with children, but Gen Z is the least likely to purchase them.
Despite Gen Z’s lack of interest, anticipated gift card purchasing shows a small uptick for holiday 2017, with 45% of consumers planning to purchase them.
“Gen Z and Millennials think to give experiential gifts because that is what they seek – people like to give what they want themselves,” added Cohen. “Whether shoppers are looking for more unique gifts in general, or reacting to current retail offerings, the popularity of intangible gifts poses a very real threat to traditional retail.”
Consumer confidence at 17-year high
Consumers are entering the holiday season in very high spirits.
U.S. consumer confidence increased for a fifth consecutive month and remains at a 17-year high, according to The Conference Board. The Board’s Consumer Confidence Index, which had improved in October, increased further in November. The Index now stands at 129.5, up from 126.2 in October. It is the highest mark since the index hit 132.6 in November 2000.
“Consumers’ assessment of current conditions improved moderately, while their expectations regarding the short-term outlook improved more so, driven primarily by optimism of further improvements in the labor market,” said Lynn Franco, director of economic indicators at The Conference Board. Consumers foresee the economy expanding at a healthy pace into the early months of 2018, Franco added.
Consumers’ assessment of current conditions improved moderately in November. The percentage saying business conditions are “good” increased from 34.4% to 34.9%, while those saying business conditions are “bad” declined from 13.5% to 12.7%. Consumers’ assessment of the labor market also improved. Those stating jobs are “plentiful” increased from 36.7% to 37.1%, while those claiming jobs are “hard to get” decreased slightly from 17.1% to 16.9%.
Consumers’ optimism about the short-term outlook was also more favorable in November. The percentage of consumers expecting business conditions to improve over the next six months increased slightly from 22.1% to 22.4%, while those expecting business conditions to worsen decreased from 7.0% to 6.5%.
NRF: Millennials were big spenders over holiday weekend
Millennials helped turn Thanksgiving weekend into a win for most retailers.
Older millennials (25 to 34 years old), were the biggest spenders over the holiday weekend, according to a survey by the National Retail Federation, with an average spend of $419.52. That’s about 25% higher than the overall average spend, which was put at $335.47.
From Thanksgiving Day through Cyber Monday, more than 174 million Americans shopped in stores and online, beating the 164 million estimated shoppers from an earlier survey by the NRF and Prosper Insights & Analytics. The survey found that over 64 million shopped both channels.
In addition, over 58 million shopped only online, and over 51 million shopped only in stores. The multichannel shopper spent $82 more on average than the online-only shopper, and $49 more on average than those shoppers who only shopped in stores.
The most popular day for in-store shopping was Black Friday, cited by 77 million consumers, followed by Small Business Saturday with 55 million consumers. The survey showed that shoppers were in the mood to find great deals. Among those who spent, 60% said the majority of their purchases were driven primarily by sales, and 48% said deals were better than earlier this season.
Top shopping destinations included department stores (43%), online retailers (42%), electronic stores (32%), clothing and accessories stores (31%) and discount stores (also 31%).
Some of the most popular gifts purchased included clothing or accessories (58%), toys (38%), books and other media (31%), electronics (30%) and gift cards (23%).
The NRF noted that this year’s Thanksgiving weekend results do not include historical data from past years due to changes made to the survey methodology to help better understand consumers’ shopping experience and to include Cyber Monday in the calculations.