Cheap Holiday Chic

The more things change, the more they stay the same — at least when it comes to the holiday season. While consumers will focus on traditional gift categories like clothing and books, what they will be buying in those categories will be different from previous years. Instead of looking for the “latest-and-greatest” gadget or accessory in electronics, clothing and toys, shoppers will be focusing on practical and personal gifts to put under the tree.

Practicality will be the over-arching theme this year, according to NRF’s holiday research. That means the silver-sequined evening clutch is out in favor of a more practical leather handbag that can be used every day (perhaps this really is the year that it’s O.K. to buy your wife a vacuum cleaner). And it’s chic to be cheap, so don’t be surprised to hear someone tell you how much of a bargain your gift was, either.

Another sign of practicality comes from NRF’s hot toys survey. When asked which “hot” toy parents would be buying for kids this year, clothing — by no definition a toy — came in at No. 19. Kids can expect a lot of boots, hats and sweaters under the tree. Who knew Santa was such a sensible guy?

Personal gifts with an emotional connection will also see resurgence this year. Since shoppers are determined to stick to a budget, they are spending extra time selecting, purchasing and, in some cases, creating holiday gifts. Whether they’re making an annual calendar from family photos, knitting an afghan or baking pies for neighbors, people are putting a tremendous amount of thought into gifts to compensate for concern that they aren’t able to spend as much as they’d like.

These trends do not bode well for gift cards, the proverbial gift that keeps on giving for retailers. According to a recent NRF survey conducted by BIGresearch, gift card spending is expected to drop 6 percent (to $25 billion) this holiday season. Some shoppers feel that cards are too impersonal during a year when the thought really does count, while others would rather stretch their dollars to find merchandise on sale.

Regardless of the reason, this means more uncertainty for retailers in a tough holiday season. Companies may sell more tangible goods in November and December, making holiday sales goals more attainable, but fewer people may be heading to the stores post-Christmas to redeem cards, affecting sales in January and February.

There is some good news in all of this: as of the second week of November, more than half of Americans had not even begun holiday shopping. So, although times are changing, it appears that the art of procrastination endures. While consumers will continue to focus on practical, personal gifts throughout the holidays, here’s hoping that last-minute shoppers are buying more than fruitcakes and eggnog.