Baker’s Dozen: 13 Holiday Tech Predictions by Industry Authority Stephen Baker

By Stephen Baker, The NPD Group

The consumer technology industry has had another strong year from a revenue standpoint, and we expect to close out the year 7 percent above last year’s historic sales numbers. But what are we expecting from the holiday in particular? Below are some CE industry sales trends we expect to see this holiday:

1. Dollar Sales Grow, While Units Decline. NPD’s Future of Tech Report forecasts revenue sales will be up 2 percent in Q4 2021 vs. Q4 2020. While this is below yearly market trend, it is noteworthy revenue growth given the 16 percent CE sales growth recorded in Q4 2020 vs. Q4 2019. In contrast, unit sales are expected to be down 5 percent in Q4 2021 vs. Q4 2020.

2. Old Habits Die Hard. Despite years of industry efforts, consumer holiday purchases pre-pandemic were increasingly concentrated on the week of Thanksgiving and Cyber Monday. In fact, in 2019 those two weeks made up 30 percent of Q4 CE purchases. Holiday 2020 disrupted that, but consumers (and the industry) are likely to return to those old habits in 2021.

3. Eat Turkey and Shop from the Couch. With fewer stores opening on Thanksgiving, online shopping will once again be center stage. More than ever before, online retail, BOPUS (buy online, pick up at store), and integrated promotion will combine to provide transaction convenience and possession options.

4. Changing with the Times. Products, pricing, and promotional activities will be in flux this holiday as manufacturers, retailers and consumers need to flex to ever-changing conditions.

5. Definitely Better, but also Bigger Screens. Consumers are investing in higher-quality screens — not just purchasing the biggest size — for at-home entertainment of all kinds.

6. You Can’t Have One Without the Other. Services and hardware are increasingly intertwined as consumers purchase devices to leverage the services they provide. From smart home cameras with accompanying video monitoring to TVs that provide access to content streaming, we will see elevated levels of interest in these impactful combinations this holiday.

7. Peripherals Become Presents. A new computer monitor, router, web cam or mouse — these peripherals have become presents as consumers continue to plus-up the home office with items that benefit their personal interests as well.

8. Patience is a Virtue for Gamers. In the face of ongoing shortages and high prices, holiday gaming buyers need to hit the patience button on their controller to get the gear they want.

9. Ringing Off the Hook. New products, 5G, foldable form factors, and improved features will help build increased demand for smartphones this holiday season.

10. Going Wireless. From headphones to mobile charging to entertainment subscriptions, consumers are trading up to wireless options to match their on-the-go needs.

11. The Holiday of Compromise. Entry-level products across CE may be harder to come by this holiday due to component shortages. This will drive consumers to trade up to more feature-laden products, with higher price tags, to get what’s on their wish list.

12. Spend More, Get More. It isn’t value pricing this holiday, it is pricing vs. value. The best value is in the best products.

13. Go Big or Go Home. After almost two years of unprecedented volumes, holiday 2021 is likely the last period for a while that the confluence of demand, lifestyle needs, installed base growth, and product refreshes all come together to produce the robust demand we have been experiencing. If you can’t win now it will be a couple of years before these opportunities come back again.

Stephen Baker is a Vice President, Industry Advisor at The NPD Group, a global business analytics firm that collects point-of-sale data from over 600,000 retail locations and millions of receipts from 130,000 consumers across multiple product categories.