electronics

IBM Analytics See Uptick In Holiday Sales

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Two years of conservative saving and cutbacks are about to give way this holiday season to big gains in consumer electronics and appliance sales.

According to IBM's analytics-based forecast, sales of consumer electronics and appliances will reach nearly $10.2 billion in November, a 4% increase over the previous November. Of that, nearly $9 billion will be for consumer electronics, and $1 billion will be spending on appliances. The trend will continue in December, with combined sales of $13.8 billion ($12 billion on electronics and $1.6 billion on appliances), also an increase of 4% over the previous year.

"People have been saving, and I believe they've been saving for larger purchases," IBM retail analytics leader Michael Haydock tells Marketing Daily. He adds that the proliferation of Internet-connected devices has moved from a "nice to have" purchase to "must have" products. "The idea of connected devices has become a requirement. It's no longer something to put off purchasing."

Some of the increased spending may be that delayed purchases -- particularly replacing aging appliances -- simply can't be put off any longer, Haydock says. Another factor may be a "reward mentality" for having come through the worst of the recession.

"It was like with automobiles. [Consumers] put purchasing off through the recession, and now we're going to see an uptick," Haydock says. "People have been holding off and now they're ready to have a little fun."

Haydock's analysis correlates with projections from the Consumer Electronics Association that spending on consumer electronics will increase 5% for the holidays over last year, even as overall holiday spending declines. According to the CEA, consumers will spend an average of $232 on consumer electronics-related gifts this holiday season -- up 5% from last year -- and the highest level since the organization began tracking holiday spending.

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