NPD: Holiday Shoppers Leaving CE Channel

By Alan Wolf -- TWICE, 10/20/2010

Port Washington, N.Y. - Fewer shoppers plan to buy their holiday gift electronics at CE specialty stores, a new survey by The NPD Group shows.

According to the research firm's Annual Holiday Survey, CE stores dropped from fourth to sixth place on NPD's top 10 ranking of retail distribution channels, with only 19 percent of respondents saying they plan to shop there, down from 26 percent last year.

The decrease jibes with an earlier report by NPD showing that intent to purchase CE products as holiday gifts dropped from 24 percent of respondents last year to 16 percent this season.

The CE specialty channel was bested by discount stores (54 percent), e-tailers (35 percent), national chains (29 percent), department stores (22 percent) and toy stores (20 percent), the survey showed, but led warehouse clubs (17 percent), outlet stores (16 percent), apparel shops (15 percent) and off-price retailers (13 percent).

All distribution channels showed varying degrees of erosion, although the results are not necessarily indicative of an overall decrease in planned holiday purchases, NPD said.

"Last year consumers wanted to spend as little as possible on gifts," explained NPD chief industry analyst Marshal Cohen. "This year they are being more selective about where they spend."

Consumers also ranked value (60 percent) and a special sale price (58 percent) as the top two factors influencing their choice of retail venue. Of lesser importance was convenience of location (47 percent), quality of products (42 percent), free shipping (39 percent), hassle-free returns (36 percent), breadth of selection (35 percent) and advertising/circulars (30 percent).

"Forty-four percent of consumers told NPD they plan to look around for the best price and value before they buy, which could benefit online sales," Cohen observed. "As consumers ‘pre-search' by scouring websites for the best prices and deals, they will likely discover that shopping online offers not only competitive prices but a whole lot more convenience and they decide to buy online."

The report, "The NPD Holiday Survey of Consumer Purchase Intentions," mirrors a holiday study released yesterday by the National Retail Federation (NRF) showing a shift away from CE stores and electronics gift giving, but conflicts with the Consumer Electronics Association's (CEA's) 17TH Annual CE Holiday Purchase Patterns Study, also released yesterday, which forecasts record CE spending and an increase in electronics' share of holiday expenditures.

The NPD report is based on responses to a survey conducted Sept. 7-15 from more than 2,000 members of the firm's online consumer panel.