With the holiday shopping season about to begin, Nielsen offers U.S. retailers and marketers five key insights to aid in attracting and retaining the loyalty of increasingly value-conscious American consumers.

1. Stick To The Basics

Necessities — rather than novelties and luxuries — are expected to drive holiday sales this year.  Practical apparel, like socks and fleece jackets, and basic household products, such as diapers, household cleaners, pet care products, and food items, are all expected to see strong sales.

2. Staying In Is The New Going Out

Items that are well-suited for in-home consumption — food, beverages, DVDs, books, and games — are also expected to sell well during the holidays and into 2009, as consumers increasingly seek out less expensive entertainment at home.

3. Value Brands, Coupon Clipping Gain Mass Appeal

Consumers are increasingly “trading down” from higher-end retailers and brands to retailers and brands associated with greater value.  Some consumers may also replace more expensive fresh foods with canned and frozen varieties.  Look for coupon clipping to become a necessity for many families.

4. Where It’s At

Online retailers, dollar stores, grocery stores, supercenters, mass merchandisers, and club stores are expected to attract the lion’s share of holiday spending, as consumers seek to minimize the number of shopping trips they make — and find good values.  In contrast, department stores and retailers of electronics, toys, home improvement supplies, and office supplies are likely to feel the brunt of the economic slowdown as consumers shift their purchases to more value-oriented retailers.

5. Perceptive Marketing Is Essential

Marketing messages that acknowledge consumers’ financial challenges and clearly communicate a brand or retailer’s value proposition will build consumer loyalty now, in the short term, and for the longer term economic recovery.

Read Nielsen’s holiday sales forecast.

View in depth Nielsen data on consumer holiday spending projections.

Go behind the numbers: read NielsenWire’s Q&A with James Russo, co-author of Nielsen’s holiday retail forecast.

Submit questions about Nielsen’s holiday retail forecast co-authors, James Russo and Todd Hale, by commenting below.

Nielsen’s holiday retail forecast predicts a 4.7% gain in dollar sales over 2007.  Unit sales, however, are expected to be virtually flat (-0.8%) versus a year ago.

The forecast includes projected sales at food stores, drug stores, mass merchandisers, and convenience stores, across 125 product categories tracked by Nielsen.

With the economy in turmoil, the 2008 holiday season will be closely watched for indications of declining consumer spending.  Declines in consumer spending were last recorded in the fourth quarter of 1991, during the recession of the early 1990s.

Go behind the numbers: read NielsenWire’s Q&A with James Russo, co-author of Nielsen’s holiday retail forecast.

View in depth data on holiday retail sales projections and consumer spending expectations.

View the full press release.

Read coverage of Nielsen’s findings in Convenience Store News and Adweek.

Submit questions about the report to Nielsen forecast co-authors, James Russo and Todd Hale, by commenting below.