Now in Retail
Holiday 2021 Trends
Consumer behaviors have changed, and their needs will continue to evolve. NPD provides data and insights about what is actually occurring in the marketplace, to help your business thrive. This is the place to find the latest information about the 2021 holiday shopping season, the ongoing retail repositioning, U.S. consumption trends, and other topics that matter to your business.
“Leading into the holiday shopping season, we can expect to see consumers spending more for better products, with fewer items under the tree. The evolving pandemic lifestyle is already influencing what consumers are buying. Layer on reduced in-store shopping frequency, and the continued strength of online shopping, and the critical role of impulse shopping will remain muffled.”
29% of U.S. consumers plan to spend more on holiday shopping than they did last year.
One-third of consumers plan to buy more gifts because they will be seeing family and friends over the holidays.
Six out of ten consumers (58%) are more comfortable shopping in stores, now that vaccines are widely available.
Source: The NPD Group / Annual Holiday Study
NPD’s Annual Holiday Purchase Intentions Study
Stay tuned to learn more about NPD’s Annual Holiday Purchase Intentions Study. Gain a valuable perspective on U.S. consumer holiday spending intentions, including trends based on comparisons to recent years, as well as across demographic and socioeconomic cohorts.
Road to Retail Repositioning
Consumer needs will rapidly shift as the U.S. progresses through the various stages of the reopening period. Brands and retailers must be ready to handle volatile swings in consumer behavior. Click on the boxes below for a look at some of the considerations that will affect retail sales — this year and beyond.
Stages: ■ Completed ■ Current ■ Future
Shifts in Purchasing as Lifestyles begin to Adjust
The New Normal
Stage 1 | Reemergence Begins
In the first stage, travel is important to watch, as many consumers gear up for trips after a yearlong break. Discretionary general merchandise industries should monitor how increased travel affects adjacent segments. For instance, our Retail Tracking Service reveals that declines in the luggage business have softened, so far this year, compared to much steeper declines throughout late 2020,. This softening will accelerate, as travel begins to pick up. Additionally, we expect an upward trend in restaurants and other service industries, as consumers begin to feel safer going out. However, it might take a while to reach pre-pandemic levels.
Key milestones to watch: About 100 million U.S. adults fully vaccinated, decline in work-from-home rate, live events and other gatherings take place with reduced capacity.
Stage 2 | Reemergence Accelerates
This stage is when we see the return of more in-person activities, events, and experiences. We expect consumers will purchase products to facilitate those experiences. Family gatherings, along with an increased physical presence at work (perhaps with hybrid arrangements and decreased office capacity), means many consumers will invest in new wardrobes, as they reemerge into the public sphere. The return to commuting will be important to watch. Even a partial return to work will impact the automotive aftermarket, as auto consumers shift their spending from discretionary do-it-yourself (DIY) items, to maintenance-focused items. Additionally, watch for growth in accessories, that consumers rely on, as they commute to and from work, including backpacks and headphones.
Key milestones to watch: Approximately 150 million U.S. adults fully vaccinated, further acceleration of workplace return, increases in commutes to and from work.
Stage 3 | Shifts in Purchasing as Lifestyles begin to Adjust
In the third stage, we expect a stabilization period in the work-from-home, learn from-home, and entertain-from-home landscape. As consumers adjust to a new lifestyle, and reallocate their spending to facilitate in-person experiences, watch for bigger swings in retail performance. Industries that surged in 2020 due to stay-at-home advisories, such as consumer technology and small appliances, may return to a more moderated growth rate compared to pre-pandemic levels. The trajectory for many of the industries that benefited in the stay-at-home environment look bright for the long term.
Key milestones to watch: About 180 million U.S. adults and 10 million kids fully vaccinated, stabilization in work-from-home-rate, the return of larger in-person events.
Stage 4 | The New Normal Approaches
In the last stage of the road to retail repositioning, retail sales will normalize. Brands and retailers across industries will need to consider how consumer behavior has been fundamentally altered during the COVID-19 pandemic. Many consumers invested time and money in purchasing and learning to use equipment to facilitate fitness, cooking, working, and entertaining at home. That means many of the industries that thrived in 2020 could remain elevated above pre-pandemic levels. At the same time, industries that struggled last year might find their business have been changed permanently. Increased levels of remote work could mean more travel and mobility, and business travel may ramp up, which would benefit accessories, like luggage and backpacks. The casualization trend that took hold in apparel and footwear last year is likely to remain.
This final stage will offer valuable indicators for how consumer purchasing will evolve throughout the rest of the decade. Brands and retailers must be tuned into the changing dynamics of the consumer spending evolution.
Key milestones to watch: Vaccines readily available, business travel returns.
U.S. Consumption Trends by Week
General Merchandise: Dollar Change Versus Year Ago
Compared to last year, U.S. general merchandise sales revenue increased by 12%, in the week ending October 9, 2021.
Source: The NPD Group/Point-of-Sale Early Indicator Report, NPD Universe, week ending October 9, 2021 Discretionary retail includes the following industries: accessories, apparel, auto parts, beauty, consumer technology, DVD/Blu-ray, footwear, housewares, juvenile products, office supplies, small appliances, sports equipment, toys, and video games
Even after the expiration of extended unemployment benefits, retail continues to see elevated growth. Looking at the week ending October 9, growth spanned almost every general merchandise industry we track; the majority grew by double digits compared to last year.
Early holiday shopping and concerns about potential product shortages are contributing to some of the recent gains, but the underlying trend is that the consumer has an ongoing interest in spending.
Across discretionary consumption, apparel and footwear are the top categories consumers plan to purchase in the next 60 to 90 days.
Source: The NPD Group / Omnibus Survey, May 2021.