LOS ANGELES — Like pretty much everything else this year, the 2020 holiday shopping season will be different because of COVID. Not only are consumers planning to shop earlier this year, but they will also buy even more of their gifts online. With fewer people traveling to see family and friends in person, 42% of all gifts will be shipped, which will have the ripple effect of influencing the types of presents people give, according to the 2020 Holiday Retail Outlook report from retail analytics firm, NPD Group. 

“This season’s gift-giving will be reflective of the time in which we are living, and the needs that go along with that,” said Marshal Cohen, NPD’s chief retail industry adviser. 

What You Need To Know

  • 51% of consumers said they will switch to buying most gifts online this year because of COVID

  • More than 40% of consumers will be shipping most of their gifts

  • Gifts related to quarantine-induced, at-home lifestyles will be popular

  • Consumers plan to spend an average of $691 on holiday shopping this year

Clothing and footwear are the most popular spending category. This year, there’s just a new addition: 31% of consumers plan to give masks as stocking stuffers. Electronics, home goods, entertainment, and beauty will all see increased spending, the report found.

Because COVID has made Americans’ lifestyles more home-oriented, many of the gifts people will choose will be practical in nature, Cohen said. Home improvement and decor, as well as products that help with in-home learning and working, will all see increases this year. 

With so many people living virtually, computer equipment such as monitors, headsets, and cameras are expected to be hot sellers, as will home-oriented products like robotic vacuums, smart doorbells, air fryers, and soda machines. There will be less spending on out-of-home experiences and more expenditure on physical products that enable in-home activities such as home spa products and family activities. 

“While the emphasis will continue to be on items that are useful to the consumer's new way of life, the holidays are likely to prompt upgrades to up the ante on many of those practical purchases. Splurging on both guilt-gifting and self-gifting will be significant components of the consumer’s retail therapy during Holiday 2020,” Cohen said, adding that 31% of shoppers plan to do more self-gifting as a form of retail therapy for what they’ve endured this year. 

Consumers will spend an average of $691 this holiday shopping season – slightly less than last year. While the economy has prompted consumers to be more cautious, they see the holidays as providing a break, the study found.

“Holiday 2020 will certainly see its share of change and new behaviors, but mostly it will accentuate underlying trends that have been developing over the past few years,” Cohen said. 

Online shopping, for example, is accelerating; 51% of consumers said they would switch to buying most gifts online this year because of the pandemic. Free shipping will influence consumers more than a special sale price for where consumers decide to shop.

Because so many gifts will be shipped this year, consumers will look to buy items that are easier and less costly to send; 53% of  consumers plan to give gift cards this year, compared with 45% last year. Subscriptions will also be popular. Food services, such as meal kits and wine clubs, are the No. 1 type of subscription consumers plan to give this year, followed by streaming services.

More than 40% of shoppers said they started shopping earlier than usual because of COVID. The holiday shopping season kicked off in October this year, the report said, due to Amazon moving up the date of its Prime Day and other retailers starting their promotions early. About 50% of consumers will start their holiday shopping before Thanksgiving, while a third plan to start Thanksgiving weekend.