A record 68 percent of U.S. consumers plan to buy tech gifts this holiday season — up 6 percent over last year — setting the industry up for what may be its best Christmas ever.
According to the 23rd Annual Consumer Technology Holiday Purchase Patterns Study, produced by the Consumer Technology Association (CTA), CE spending will increase 3.1 percent to more than $36 billion in November and December, driven by a compelling mix of legacy- and emerging-tech products.
By comparison, total holiday sales are expected to grow 3.8 percent to nearly $825 billion, the research suggests, excluding gas and restaurant sales.
“The 2016 holiday season looks to be the biggest on record for the tech sector, thanks to fresh and innovative products on the market such as wearable tech, VR headsets, drones and digital assistant devices,” said CTA chief economist Shawn DuBravac. “Our research also finds that most Americans are now using tech devices to help them research and buy tech gifts, a key driver of tech spending this holiday.”
Leading the product pack once again are headphones, the gift of choice for 40 percent of consumers. Conversely, those on the receiving end are most hoping to find laptops, TVs, tablets, smartphones and gaming consoles beneath their trees in December.
Where will consumers go for all these goodies? CTA’s study found that more than half (57 percent, up 2 percentage points) are likely to shop online for tech this year, although physical stores remain the main source of CE gift purchases, with 74 percent likely to purchase from a brick-and-mortar location, albeit down 3 percentage points from last year.
Total online holiday sales are expected to grow 16.4 percent to $84.2 billion, CTA forecasts, while sales through mobile devices will soar 45.2 percent to $20.1 billion.
The CTA study is based on a September telephone survey of 1,005 U.S. adults ages 18 and over. The complete report echoes more general findings from the National Retail Federation (NRF), which is similarly anticipating one of the best holiday selling seasons in a decade.
The trade association is projecting retail sales in November and December to grow 3.6 percent to $655.8 billion — significantly higher than the 10-year average of 2.5 percent, and above the seven-year average of 3.4 percent since economic recovery began in 2009. By comparison, total holiday sales increased 3.2 percent last year.
E-tailers and other direct sellers have further cause to celebrate, as the NRF is forecasting that channel’s sales to grow 7-10 percent for the period, to as much as $117 billion.
“All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season,” said NRF president/CEO Matthew Shay.
Possible roadblocks include the presidential election and geopolitical uncertainty, noted NRF chief economist Jack Kleinhenz. Nevertheless, “Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending throughout the holiday season,” he said.
The holiday selling season is especially critical for CE and appliance retailers, who last year reaped 22.3 percent of their total annual sales volume in November and December, the NRF said.
To help sell all those holiday goodies, the NRF expects retailers to hire upwards of 690,000 seasonal workers between now and year’s end, compared to 675,300 last year.
The NRF forecast excludes auto, gas and restaurant sales, and is based on several indicators including consumer credit, disposable personal income, and prior months’ retail sales.