By Paul Gagnon, Mike Crosby and Ben Arnold

We have reached the peak of the holiday shopping season, and before results for Black Friday and Cyber Week are available, we thought it would be important to check in and see how the season is progressing. 

So far, seven weeks into the holiday quarter, consumer technology sales are running close to 2023 at this same time, although there was a significant dip in weeks 44 and 45. However, this wasn’t unexpected. The later occurrence for Black Friday (shifted a week later this year) and the impact of the election crowding out retailer promotions at the end of October and beginning of November have pushed the start of promotions closer to the core holiday season. Additionally, Circana’s Holiday Purchase Intentions survey of consumers in September indicated a later start to holiday shopping this year.

Total dollar sales for the seven weeks ending Nov. 16 are up about 1%, while our forecast for the total Q4 period is just more than flat. With on-target retail performance in tech so far, it’s important to look at some of the key holiday categories to get a sense of where consumers are voting with their pocketbooks.

TVs

Demand has continued to rise by low- to mid-single-digits on a unit basis as consumers continue upgrading their TVs and taking advantage of some improved price drops as compared to this summer. However, the shift to more value priced sets has continued, though slowing, leading to some mild revenue erosion. The deals have started to pick up, though, post-election, and we are starting to see a strong consumer response in this pre-Black Friday period. TVs 65 inches are larger are performing better so far, especially XXL TVs bigger than 75 inches.

Home Audio

Soundbar sales are off to a sluggish start without any significant promotional effort yet to match the uptick in TV discounting. Price and promotion metrics from October point to potentially strong response by consumers to soundbar promotions during Black Friday. Unlike the TV category, where consumers can buy a clearly bigger TV for the same or less money than their previous purchase, it is harder for consumers to see an objective increase in bang for the buck compared to their last soundbar purchase, so there is more resistance to buying off-promotion.

PCs

Consumers are all about value this Black Friday, as economic uncertainty and ongoing inflationary pressures continue to influence buying behavior, leading many to hunt for deep savings and bundle offers across the PC spectrum. Notebook unit volume is forecasted to increase by 1% in Q4 while Desktops are expected to fall modestly year over year. “Doom spending” may become more prevalent this Black Friday as consumers — feeling the squeeze financially — seek to make the most of perceived lower prices and an opportunity to splurge, with many not just wanting a deal but also feeling a sense of urgency to “buy now” before market conditions turn unfavorable and prices increase.

Portable Audio

Stereo Headphones sales will see a strong 2024 carry over into a successful holiday this year, with several new products on the market and ample discounts to fuel demand. While I expect to see attractive promotions on True Wireless products this holiday even as the category has a fresh lineup of products, the top audio brands will also duke it out in the premium On/Around Ear wireless segment this season, where consumers will find a variety of brands and price points and compelling innovations like immersive sound. Streaming Speakers will also be a category to watch this season, especially Party Speakers, which have sold fairly well on promotion this year. 

As we get results for the week of Black Friday, we should start to see if consumers are buying in line with their elevated expectations for spending during the core shopping season. The week just prior to Black Friday is showing strong performance compared to the same period a year ago. Stay tuned for more updates from Circana.