• by Aaron Baar , October 21, 2010

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.