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What Will Be The Hottest Tech Gifts This Holiday?

Holiday sales of CE products are expected to hit nearly $34.2 billion this year, the Consumer Electronics Association (CEA) said.

Driving the season’s 2.3 percent increase is increased consumer interest in emerging technologies like smart-home devices, wearable activity trackers and drones, the trade group reported.

CE will also ride the wave of a holiday season that CEA chief economist and senior research director Shawn DuBravac described as possibly “the biggest on record.”

According to CEA estimates, total holiday sales are expected to grow 3.4 percent, to $788.5 billion.

In contrast, the National Retail Federation (NRF) is projecting a $630.5 billion bounty for merchants this holiday season — but a 3.7 percent increase over last year, when seasonal sales rose 4.1 percent.

CE sales growth has similarly slowed from last year, when tech spending was up 3 percent to $33.4 billion, CEA said.

NRF pointed to reduced job formation, deflationary retail prices and a spending shift toward services as drags on holiday sales.

But if the percentages sounds paltry they’re not: NRF said the total projected holiday gain is still “significantly higher” than the 10-year average of 2.5 percent.

Even more significant will be the increase in online sales, which NRF is forecasting will grow between 6 and 8 percent, to $105 billion, or nearly 17 percent of all holiday sales.

Not surprisingly, online sales skew heavily toward CE. According to the CEA’s 22nd Annual CE Holiday Purchase Patterns Study, more than half (55 percent) of consumers are likely to shop for tech online this year. However, traditional retail channels remain essential sources of tech gift purchases, with 77 percent of consumers — on par with the past four years — likely to purchase from a brick-and-mortar location. What’s more, households with children are significantly more likely to shop online (69 percent) than households without children (56 percent), and more than two-thirds of consumers who plan to spend money on consumer tech will likely use a mobile device such as a smartphone or tablet to help them shop.

“More consumers outside of the traditional early adopter and millennial generation are using tech to buy tech,” observed Steve Koenig, senior director, market research, CEA. “They’re relying heavily on online shopping and mobile devices in an effort to have a more informed and convenient holiday shopping experience.”

Contributing to this season’s bounty will be emerging tech, which will be purchased by one in three holiday shoppers (33 percent), the CEA study showed. The most popular 2015 holiday gifts among emerging tech will be smart home devices (15 percent), wearable fitness activity trackers (12 percent), smart watches (12 percent), action cameras (12 percent) and drones (seven percent).

Nevertheless, legacy products — specifically TVs, tablets, smartphones, computers and gaming consoles — remain the most wished for tech products, in that order, the study found.

Conversely, CEA expects headphones and earbuds (28 percent and 27 percent of consumers, respectively) to be the most popular tech given during the 2015 holiday season. Tablets (26 percent) will also be popular this year, followed by portable Bluetooth speakers (25 percent), smartphones (24 percent) and notebook/laptop computers (25 percent).

  More than half of shoppers (58 percent) plan to purchase a tech accessory this season. Videogame accessories will see one of the largest increases in popularity with one in five shoppers (23 percent) likely to purchase — a 7 percentage-point increase from last year (16 percent). Three new accessories categories tracked this year include digital toys or videogame figurines (21 percent), selfie-sticks (9 percent), and action camera accessories (7 percent).

All told, 65 percent of Americans, or roughly 160 million people, are planning to buy tech gifts this holiday season, a steady increase over last year, the study showed.

 Among other CEA findings, more consumers plan to shop later in the season, consistent with a belief that the best deals are at or after Black Friday. More consumers (71 percent, a 10 percentage-point increase from 2014) plan to wait until November or December to start their holiday shopping, while 24 percent (down from 31 percent in 2014) indicate they anticipate shopping in October or earlier.

According to NRF president/CEO Matthew Shay, price and value, as well as timing, will also determine how, when, where and why people shop over the holiday season, with retailers competing on price, digital initiatives, store hours, product offerings and other lures.

“With several months of solid retail sales behind us, we’re heading into the all-important holiday season fully expecting to see healthy growth,” he noted. “However, while economic indicators have improved in several areas, Americans remain somewhat torn between their desire and their ability to spend; the fact remains consumers still have the weight of the economy on their minds, further explaining the complex retail spending environment we are seeing right now. We expect families to spend prudently and deliberately, though still less constrained than what we saw even two years ago.”