After periods of computer and consumer electronics shopping during the Covid pandemic shutdowns, people may not feel like buying more devices this holiday season, analysts say. Investors. com. Rising inflation and concerns about the macro economy could also deter customers from buying during the holiday season.
“The big question is, will people be in the shopping mood?said Ben Arnold, an analyst at retail tracker group NPD. “Comparisons with previous years will be difficult. This is because 2020 and 2021 were very strong years of consumer electronics sales“.
The NPD Group expects US holiday spending on technology products to fall 6% from a year ago. However, sales will still be 11% higher than the pre-pandemic level in the 2019 holiday season, Arnold told Investor Business Daily.
Work-from-home and shelter-in-place trends have increased sales of computers, tablets, video games, and home entertainment products and services. Now that most people probably have what they need in these categories, Arnold continued to develop the concept.
Holiday Sales Forecast: “See Below”
Morgan Stanley analyst Eric Woodring echoed the negative sentiment about holiday sales in a recent report titled “Consumer Electronics Holiday Spending… See Below.”
“Consumer sentiment remains largely negative, but it was more mixed in our most recent survey,” Woodring said in his note. “However, the results (from the survey) point to a very difficult holiday season for consumer devices“.
“What’s even more interesting about this latest survey is that about three times as many respondents expect to spend less (than they expect to spend more) on consumer electronics and computers this holiday season than they did last year, with more than 70% waiting to get discounts.Woodring said.
Forecast record discounts on consumer electronics
The good news for consumers is that retailers can offer deals on major gift categories like televisions and laptops to lure shoppers into stores and free up inventory.
Adobe Analytics expects online discounts to reach record levels for computers, consumer electronics, and toys this holiday season. It expects discounts on computers to reach 32%, up from 10% in 2021.
It sees consumer electronics discounts of up to 27%, up from 8% last year. Adobe said TV prices are likely to be cut by up to 19% this season, up from 11% in 2021.
A survey conducted by the Consumer Technology Association shows that video streaming services and video game products are among the top tech gifts people plan to give this season. Other sought-after gifts include portable audio products, smartphones, and health and wellness technology.
Apple plays in the top growth categories
Apple (AAPL) is a potential beneficiary as it plays in most of the growth categories. Its range of holiday products includes the new iPhone, iPad, Apple Watch smartwatch, and AirPods wireless headphones.
However, some of the coveted devices are in short supply this year due to production issues. Including Apple iPhone 14 Pro smartphones and Sony (SONY) PlayStation 5 video game consoles.
Logitech CEO Bracken Darrell said his company expects to have a good holiday season thanks to being in some hot categories. They include equipment for video games and equipment for content creators who make live video streams and podcasts.
“We’re entering the holiday season where I don’t think we have a better selection of products to buy,” Daryl told IBD.
Consumer Electronics: Digital gifts are on the rise
Meanwhile, digital gifts are growing in popularity. This includes a slew of subscription video streaming services like Netflix (NFLX), Walt Disney’s Disney+, Hulu (DIS), and Warner Bros. Discovery’s (WBD) HBO Max, Paramount Global’s (PARA) Paramount+, Apple TV+, and more.
A recent survey by Recurly indicated a big holiday season for digital subscriptions, particularly among millennials and Gen Z consumers. About 63% of respondents are considering gifting subscriptions, while 70% are interested in receiving gift subscriptions.
The top three subscription categories most likely to be given as electronic gifts to consumers are video streaming at 54%, gaming at 39%, and audio streaming at 36%, Riccurli said. The majority of consumers, or 61%, said they were interested in offering a subscription for at least six months.
Another digital gift is video game software. “The shift from boxed media to digital downloads has not affected the game software talentTake-Two Interactive Software (TTWO) CEO Strauss Zelnick told IBD. “People can still give gifts even if they are digital“, He said. “Basically you can gift a code. About 75% of our activity is on the console side is digital and obviously 100% is on the mobile side.“
Take-Two is well-positioned for the holiday season, Strauss Zelnick added, with titles like “NBA 2K23,” “PGA Tour 2K23,” and “Marvel’s Midnight Suns.”
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