NPD forecasts bigger emphasis on in-store shopping this holiday season

Look for changes to when, where and how consumers shop this holiday season.

Consumers expect more of their holiday purchases to be made in-stores (46%) than online (45%) this year — a significant shift from last year’s plan for half of their shopping to be done online, according to a survey by The NPD Group.

The number of consumers planning to do holiday shopping online fell from 85% last year to 80% this year, which is the largest shift favoring stores in years, NPD said. Also, consumers’ plans to shop mass merchants grew the most from 2021, while plans for pureplay e-commerce shopping declined the most.

In other changes, “early” pre-Thanksgiving shoppers are starting even earlier, with 39% having started or plan to do so before October, NPD said.

“Early season promotional events will help consumers to spread out their spending, while also setting the stage for a more spread-out holiday shopping season,” said Marshal Cohen, chief retail industry advisor for NPD, which recently merged with Information Resources (IRI). “Navigating this year’s fluctuating shopping dynamics will require patience and persistence with the consumer, and a perspective on the holiday season that extends beyond the traditional retail definition.”

Financial concerns will cast a shadow over holiday shopping, the survey found, but fading pandemic concerns will open the door to more gatherings:

• One in five (20%) holiday shoppers say they will spend less over the holidays because their economic situation has changed. 
• More than one in ten (12%) consumers will be spending less on gifts so they can spend more on holiday entertaining-related expenses, like food, drink, and decorations. 
• Over half (52%) of consumers are less concerned about COVID-19 compared to a year ago (up from 32% in 2021).
• More than half (55%) of consumers are planning to go to a friend or family member’s home for the holidays (up from 47% in 2021).

“Consumers are ready to get out and celebrate over the 2022 holiday season, but last year’s optimism has taken a beating as financial concerns have them feeling a bit more grinchy this year,” said Cohen. “Despite economic challenges, consumers still have just as many friends and family members to shop for during the holidays, they will just be spending differently.”

While the majority of shoppers plan on spending the same or more than last year, the share of consumers who plan to spend less this year increased over last year, according to NPD. As a result, spending on par with 2021 levels is expected during the traditional November and December holiday shopping season, with the potential of 0.5% to 2.5% growth when the season is expanded to include October and January.