Holiday sales are expected to grow by 4 percent this year to $447.5 billion, which is the slowest holiday growth since 2002, according to the National Retail Federation (NRF).
In a holiday preview call, titled “Hot or Not: A 2007 Holiday Preview,” the NRF’s Scott Silverman said that, while this year’s holiday growth is expected to grow more slowly than in years past, it will still be up significantly from 2002, when sales grew by only 1 percent.
“While this may not be the rosiest of predictions, this is certainly not a æsky is falling’ mentality,” he cautioned. “Consumers will be more conservative in their holiday spending, but they will still be out shopping.”
In the fashion and apparel categories, expect to see evening wear and diamonds driving sales. In addition, tailored denim products – across men’s, women’s and children’s wear – will be a hot item. Women’s boots also will help drive sales this holiday season, with a focus on three-quarter length boots rather than knee length.
Interestingly, fashion will be getting more high tech this season.
“Technology is having an impact on fashion,” said Dan Butler, VP of retail operations and merchandising at the National Retail Federation. “Whether its sweaters or vests designed to hold handheld accessories and iPods, or handbags, which are designed for these devices, we are going to see a lot more of these kinds of products this season.”
IPod and cell phone accessories will be popular tickets this year, including a new breed of accessories designed to hold these items in the home. Expect to see more widescreen televisions under the tree this year, along with widescreen computer monitors, as the prices of these products have come down.
Gift cards are also going to be a big-ticket item this year.
“Gift cards are growing in their purchase and acceptance and you are going to see [many] more retailers cross-promoting these, such as grocery stores selling Starbucks gift cards,” Butler added. “There is also a new trend in personalizing these gift cards with music and photos, and I think this will evolve.”
Despite the slow housing market, consumers are expected to buy in the home category – whether as a gift or for themselves. Consumers are giving the impression of learning to live with the homes they have, since sales are down.
At the same time, expect retailers to be more patient this year and to start marketing later.
“Fewer retailers are setting up earlier this year as they have done in the recent past, in order to save the excitement for the holiday and to drive sales around this time,” Butler remarked.
Interestingly, while Wal-Mart is not setting up as early, they are letting consumers know about holiday toy pricing early.