Spending Plans
This will be a holiday season polarized between those still feeling the recession and those who have begun to spend again. This divide will greatly impact where consumers shop, what they buy and how much they spend. Of those surveyed, 66 percent plan to spend the same as they did in 2010. Thirty percent plan to spend between $500 and $1,000 this season, with 50 percent planning to spending between $250 and $500. Only 17 percent of consumers said they planned to spend more than $1,000.

Tech the Halls
After clothing and apparel, topping the lists of those who are headed out to stores on Black Friday is tech and consumer electronics. No surprise considering the presence of gadgets on the wish lists of most American kids.

Consistent with U.S. kids’ 2010 wish lists, the Apple iPad is the most desired consumer electronic among kids ages 6-12 for holiday 2011. In fact, the iPad increases its stronghold, with nearly half (44%) of kids expressing interest in the product, up from 31 percent in 2010. Two other popular Apple devices – iPod Touch (30%) and iPhone (27%) – round out kids’ top three, with computers and other tablet brands each appealing to a quarter of younger consumers.

Many kids will also ask for gaming devices this year, with two products that offer unique gaming technologies – Nintendo 3DS (25%) and Kinect for Xbox 360 (23%) – leading the way. Given the 3DS’ spring 2011 release date and the surge in Kinect interest versus last year (up from 14%), parents can expect both devices to be frequently requested this holiday season. Beyond these, older Nintendo DS models continue to resonate with young gamers (22%), while the PlayStation 3 (17%) and Xbox 360 (16%) edge out the Nintendo Wii (11%) as the most desired gaming consoles.

Among consumers ages 13 and older, appeal for the iPad (24%) has also broadened relative to last year (18%), and exceeds that of computers (18%), 2010’s top item. Further, it appears the iPad has successfully paved the way for other tablet offerings, as a notable 17 percent of adults/teens also express interest in non-Apple tablets.

E-Readers (18%) also exhibit heightened appeal among teens and adults compared to last year (15%), while gaming devices on the whole are somewhat less likely to be of interest to the 13+ crowd. The exception is Kinect for Xbox 360, which appeals to 12 percent of those ages 13+, compared to eight percent in 2010; though, notably, last year’s data was collected prior to the product’s well-supported, large-scale launch on November 4, 2010.

With so many products to choose from across both existing and emerging technologies, electronics are well-positioned to find their way onto shoppers’ lists again this season – and parents will clearly have some tough decisions to make as they weigh kids’ wants against their holiday budgets.

More insights on gamers, console dynamics, and allocations of time and money within gaming and the broader entertainment category will be featured in the third annual Nielsen 360° Gaming Report: U.S. Market, available in January. Additionally, an overview of key findings from the 2010 version of the report can now be downloaded here.

Survey conducted among a general population sample of n=3,000 in the United States, October 2011.

Consumers planning to spend more than last year on holiday gift giving are in the minority, but those that are planning to increase spending are concentrated in the Asia Pacific and Middle East regions. Europe dominates the top 10 list of countries with the largest percentage of consumers planning to spend less this year.

Books, Technology and Clothing Top Gift-Giving List
The product categories likely to get a sales boost this holiday season include books, clothing and technology, where more than half of global online consumers expect to spend more or about the same as last year.

Regionally, holiday shopping preferences vary for the top five gifts where consumers plan to increase spending compared to last year. Technology products are at the top of the list in Asia Pacific and Middle East, toys in North America, books in Europe and clothing in Latin America.

While holiday traditions and celebrations differ across the globe, celebrating within a holiday budget is universal. Many consumers still grappling with a sense of economic uncertainty are in a recessionary mindset. As a result, continued spending restraint in many parts of the world will likely have an impact on consumers’ holiday gift-giving budgets.

To help narrow the focus of this analysis, Nielsen filtered the field to those titles releasing on at least one of the three major consoles (Xbox 360, PlayStation 3, Wii) during the timeframe of late August to late November. This year’s list underscores the various interests of gamers—as well as the strength of video game brands. All but one of the Top 20 titles stem from a franchise, with brands such as Madden NFL and The Legend of Zelda dating back more than 20 years. Deep Silver’s Dead Island represents the lone new IP included on this year’s list.

Activision’s Call of Duty: Modern Warfare 3, an expected juggernaut for this holiday season, is desired by more than one quarter (27%) of active gamers. Microsoft’s Gears of War 3 and EA’s Madden NFL 12 follow closely behind; both titles were selected by nearly one out of every five (19%) active gamers. Apart from Gears of War 3 for Xbox 360, other platform exclusives expected to resonate strongly with consumers in the coming months include Nintendo’s The Legend of Zelda: Skyward Sword for Wii and Sony’s Uncharted 3: Drake’s Deception for PS3.

Nielsen’s Top 20 Games to Watch is supplemented by information from NM Incite, a Nielsen McKinsey company, which analyzed the primary elements driving consumers’ online conversations around each title. Recent consumer buzz shows that those anticipating Ubisoft’s Assassin’s Creed: Revelations are excited for the return of multi-player functionality to the franchise, while gamers looking forward to Warner Bros Interactive’s Batman: Arkham City are speculating on the villains they’ll face in the new title. Fans of EA’s FIFA franchise are hoping for more pro and career mode options in the upcoming iteration, and those addicted to Microsoft’s Dance Central are rejoicing in the news that they’ll be able to import tracks from the original title into the sequel.

While Action/Adventure games hold the most spots in the Top 20, the list is a testament to the diverse interests of today’s gamers—from the intense action of First Person Shooters like Square Enix’s Deus Ex: Human Revolution, to the energetic enthusiasm of Music / Rhythm games such as Ubisoft’s Just Dance 3, to the epic sense of adventure in Bethesda’s RPG Elder Scrolls V: Skyrim. Sports and racing titles like 2K’s NBA 2K12 and EA’s Need For Speed: The Run are represented as well.

“Savvy consumers are taking advantage of aggressive retail promotions,” said James Russo, vice president, Global Consumer Insights, The Nielsen Company. “Consumers know this week especially is critical for retailers and retailers are going to take extreme steps to get consumers’ attention.”

Additional Insights:

• Holiday Spend: Nearly one-fifth (17%) of consumers plan to spend more than $1,000 this holiday season while one-quarter will spend 500 – $1,000. Twenty-seven percent will spend $250 – $500. Only seven percent of consumers will spend less than $100.
• Making a List, Checking it Twice: Fifty-five percent of consumers tell Nielsen they are planning their holiday spending, armed with a shopping list.
• Retail Winners: Nearly three-quarters (74%) will be shopping department stores, while nearly half are visiting supercenters/mass merchandiser stores. Other shopping locations: online (45%), electronic stores (38%), toy stores (32%), dollar stores (29%), grocery stores (32%) and warehouse clubs (27%).
• More Presents?: Although the majority (58 percent) of consumers plan to spend about the same this holiday season, nearly 20 percent will spend more.
• Nielsen Holiday Forecast: Nielsen predicts a more balanced level of essential and discretionary spending and expects online retailers experiencing the biggest surge while brick and mortar stores hold steady. The company forecasts a strong season for technology products and gift cards with a slight uptick in discretionary items such as jewelry and DVDs.

“Consumers have spent the better part of two years adjusting their behavior and consumption levels and we see that reflected in their holiday spending,” said Russo.

Nielsen surveyed more than 1,400 consumers, demographically and geographically representative of the total U.S. population. The phone surveys were conducted the week of December 13, 2010.

To the buying brain, the barrage of holiday messaging can come across as so much noise. Overwhelmed by the clutter of competing messages and displays, the brain tunes out all but the most clear and relevant ideas. How to ensure that your efforts make the mark? Follow these 10 best practices for making your shoppers’ buying brains happy and engaged this holiday season.

1. Resist the temptation to overwhelm the senses.
   Especially for Grandma and Grandpa, whose brains have to work harder to suppress sensory clutter, it pays to  minimize distractions. When using music, scents, and sounds, keep them soothing and pleasant for the Boomer brain.
2. Use mirror neuron activation to pull consumers in to your space.
   Mirror neuron activation is what happens when you see someone doing something — such as drinking a glass of eggnog—and the part of your brain that would be activated if you yourself were drinking eggnog, is also activated.  Women’s brains in particular respond to mirror neuron activation.
3. Parting with money triggers pain activation in the brain.
   Make sure your salespeople are as polite and friendly as possible during the holiday rush to make this process less  painful for the beleaguered shopping brain.
4. Be judicious in your use of red.
   It is a very powerful color and will trigger a strong response.
5. Keep the sharp edges hidden, when possible.
   These trigger an avoidance response in the brain, and during the holiday frenzy, this is the last thing the brain wants to encounter. Rounded corners and softened edges put the brain at ease so the focus can be on your products.
6. Keep your message authentic.
   The brain detects insincerity every time.
7. When feasible, arrange displays and graphics in groups of no more than five elements.
   The brain can instantly process a group of images of five or fewer items. More than that and cognitive processes must be engaged to take in the stimuli, taking more energy for the brain to manage the input.
8. Keep your stores clean and neat.
   Your female shopper’s brains are especially on the lookout for signs that your store is not hygenic or safe.
9. Keep your communications consistent during this frenzied time.
   Check the language for your promotions on all your platforms—in the store, on the package, in advertising, and on social media—so the brain does not have to work hard to take in inconsistent information.
10. Brains amount to 2% of our body weight, but account for 20% of our energy consumption.
    Make life easy for these energy hogs, and try to keep everything as simple as possible. Give your shoppers’ brains a  delightful holiday season!

Download 10 Ways to Engage the Buying Brain During the Holidays.

Learn more at: neurofocus.com

Across a multitude of electronic offerings, the Apple iPad leads all devices (31% interest in future purchase) among American kids ages 6-12. Apple’s iPod Touch is also popular choice among kids, generating similar levels of interest as computers. Of note, the iPod Touch outpaces the perennial handheld gaming favorites Nintendo DS and Sony PlayStation Portable – though look for the Nintendo 3DS to make a splash with young gamers when it releases in Spring 2011. Among gaming consoles, kids indicate they will be requesting the Sony PlayStation 3 the most this year; however, the platform will be competing with a variety of equally-popular mobile devices.

For the rest of U.S. consumers, electronic upgrades look to be a popular trend this year, with future interest in commonly owned devices such as computers, televisions, and smartphones outpacing other electronic offerings among consumers ages 13+. Kids aren’t the only ones interested in the iPad: fully 18% of the 13+ population is also eyeing this hot new offering. The emerging technologies offered by Blu-Ray players and E-Readers also have good traction with teens and adults.

Beyond these products, gaming devices appear to be ready for another solid holiday showing. Console interest among ages 13+ is led by the Nintendo Wii (15%) and Sony PlayStation 3 (13%), which both maintain an edge over the Microsoft Xbox 360 (9%). Much has been made of new motion peripherals from Sony (Move for PlayStation 3) and Microsoft (Kinect for Xbox 360), and these gadgets garner sizeable interest (9% and 8%, respectively) – though of note, interest was gathered prior to Microsoft’s recent large-scale media campaign for Kinect, which launched in the U.S. on November 4.

Given the continued pressure on consumer spending, it is difficult to know how robust a holiday season this will be for tech devices, but this survey suggests the electronics aisle will be heavily traveled this season.

More insights on gamers, console dynamics, and allocations of time and money within gaming and the broader entertainment category will be featured in the second annual Nielsen 360° Gaming Report: U.S. Market, available in January.

“Consumers are ready to spend, but in a mindful manner,” said James Russo, vice president, Global Consumer Insights, The Nielsen Company. “Consumers continue to closely plan their spending in this persistently difficult economic climate and for Black Friday that means shopping lists. Consumers are increasingly savvy and know that retailers will continue to offer aggressive promotions as we work our way through this critical retail season.”

Additional Insights:

• First Timers: Of the 19 percent of Americans planning to shop Black Friday, 10 percent will be shopping Black Friday for the first time.
• Ready to Spend: The majority (61 percent) of Black Friday shoppers plan to spend $100 – $500. Eleven percent plan to spend more than $500 while 25 percent plan to spend less than $100.
• Planful Shoppers: Nearly 60 percent of those shopping Black Friday will be armed with a shopping list.
• Retail Winners: More than three-quarters (76 percent) tell Nielsen they will be shopping at department stores on Black Friday, while 55 percent will shop at supercenters/mass merchandiser stores and 52 percent will shop at electronics stores. Other Black Friday shopping locations include: toy stores (35 percent), online (23 percent), and dollar stores (22 percent).
• Black Friday Buys: Sixty-four percent of shoppers will buy apparel, while 60 percent will buy electronics and 47 percent will buy toys. Video games (36 percent), gift cards (35 percent) and discretionary items such as sporting goods (27 percent) and jewelry (22 percent) also make the Black Friday shopping lists.
• Nielsen Holiday Forecast: Nielsen predicts flat spending for the holiday season, with online retailers experiencing the biggest surge. The company forecasts a strong season for technology products and gift cards with a slight uptick in discretionary items such as jewelry and DVDs.

“This holiday season isn’t all about the basics,” said Russo. “It’s about retailers understanding consumers’ new definition of value —‘I want what I want but at the best price’ — as they go after share of wallet.”

While more consumers are expected to head into the holiday season with the intent to buy compared to last year, expect the shopping to be subdued and value-focused. The Nielsen Company predicts consumer holiday spending to closely reflect 2009 spending with flat dollar sales at approximately $89 billion, and flat to declining unit sales, down 0.15 percent. This year’s holiday forecast follows two previous seasons where Nielsen’s predictions on unit and dollar sales fell within 1.5% of actual results.

Consumers are concerned about the jobless recovery and managing their personal finances. As a result, they are closely planning their spending and continue to reduce their shopping trips while placing more emphasis on value. Fewer shopping trips make every retail interaction critical this holiday season and retailers need to turn this increased, but restrained, optimism into sales.

Taking into account more than 500 category-level forecasts of core items sold across the food, drug and mass channels, including Walmart, coupled with Nielsen’s September 2010 survey of close to 25,000 demographically representative U.S. households, below is a list of what retailers and manufacturers can likely expect this holiday season:

Making a List . . . and Buying
More consumers plan to buy this holiday season, with 36 percent telling Nielsen they will spend less, compared to 42 percent in 2009.

Holiday Winners and Losers
Value retailers will attract shoppers, but online retailers will see the biggest surge. Unlike 2009, consumers express moderate interest in spending more across a broad spectrum of retail channels, such as consumer electronic, pet, liquor, department, convenience/gas and home improvement stores. Consumers plan to spend less this year in mass merchandiser stores, while plans for spending in supercenters, club, grocery, toy, book and office supply stores remain flat.

Who Shops Where?
Consumers earning $70K, as well as those earning $100K or more, will drive online store visits. Dollar store visits will be driven by consumers with incomes $50K and less, which is an increasingly higher income shopper than previous years. All income segments will be attracted to mass merchandisers, supercenters and club stores.

Earn Less, Plan to Spend More
Increases in consumers’ holiday spending is driven by lower income consumers, with six percent of those households earning less than $20K planning to spend more, compared to four percent of higher income households ($100k+) planning to do so.

What’s Hot
Nielsen predicts a strong season for technology products and gift cards, with some possible upside surprises in discretionary items such as apparel, toys, videogames, books and even vacations, especially among upper income households ($100K+).

What’s Warm
Discretionary items such as jewelry and DVDs are forecasted to see a slight uptick, as consumers express a desire to spend more on these items. What’s not? Consumer spending on sporting goods, CDs, cookware, and bed and bath items will be flat.

Consumers Buying and Watching
Consumers are spending a considerable amount of time in front of the TV during  the weeks surrounding the holidays, with the week between Christmas and New Year’s ranked as the top week for overall live television viewing, using a DVD player and playing video games. The week of and the two weeks following Thanksgiving rank among the top ten weeks for men’s TV viewing, a consideration for retailers to take into account when planning their media buys.

Consumers’ desire for value continues into this year’s holiday season. In this new normal however, consumers have redefined value. Value is not about price, it’s about the balance between price and benefits. Retail channels offering a clear value proposition and those that focus on consumers’ desire to plan as they manage personal finances, such as online stores, will do well. More and more, it’s about capitalizing on the interactions with an increasingly savvy—and at times disloyal—consumer. Those value propositions tailored around benefits beyond price will resonate with consumers.

“Christmas isn’t sometimes called the silly season for nothing,” said Mark Higginson, Director of Analytics at Nielsen’s online division.  “Shopping centers and malls are extremely hectic and crowded this time of year, and for many consumers, online retail channels offer an increasingly appealing opportunity to shop from the comfort of one’s own home rather than battle the crowds.”

With the strong exchange rate, many Australians were expected to look to overseas web sites to make online purchases.  But Nielsen found that a mass migration to US or UK sites has not materialized; between July and October, the volume of traffic to major Australian, UK and US online retailers has remained relatively unchanged.

“Local online retailers need to be cognizant of the risk of losing shoppers to cheaper overseas sites.  When all is said and done, it will be interesting to see where the traffic points.  While we haven’t seen anything of note to date, it’s very possible that Australian consumers are simply biding their time and waiting to see what retailers offer in the way of pre-Christmas bargains, both locally and abroad,” concluded Higginson.