CTA Predicts Record-Breaking Holiday for Tech

More Americans than ever before—68 percent, or roughly 170 million people—plan to buy technology gifts this holiday season, a 6 percent increase over last year, according to new research from the Consumer Technology Association (CTA).

Headphones top the list of gifts people plan to give and gifts based on emerging technology are figuring prominently into shopping plans, led by drones, virtual reality gear, and wearable electronics such as smart watches.

CTA forecasts spending on tech will increase 3.1 percent to reach $36 billion during the upcoming holiday season and estimates total online holiday sales will grow by 16.4 percent to $84.2 billion. Online sales through mobile devices like smartphones and tablets are expected to grow by 45.2 percent to $20.1 billion.

"The 2016 holiday season looks to be the biggest on record for the tech sector, thanks to fresh and innovative products on the market such as wearable tech, VR headsets, drones, and digital assistant devices," said Shawn DuBravac, chief economist, CTA. "Our research also finds that most Americans are now using tech devices to help them research and buy tech gifts, a key driver of tech spending this holiday."

The 23rd Annual Consumer Technology Holiday Purchase Patterns Study found more than half (57 percent, up 2 percent over 2015) of consumers are likely to shop for tech online this year. Physical stores will remain the main source of tech gift purchases, with 74 percent of consumers likely to purchase from a brick-and-mortar location—down 3 percent from last year.

CTA expects headphones (40 percent) to be the most popular tech gift given this year, driven in part by tech industry movement toward wireless audio devices.

The tech products U.S. consumers most want to receive as gifts are laptops, TVs, smartphones, tablets, and videogame consoles, according to the study.

Drones, virtual reality, and wearables are expected to make a strong showing on holiday wish lists this season as a record-high number of consumers plan to give the gift of emerging technology. The most popular gifts include:

• Wearables (27 percent of consumers plan to buy), led by smart watches (17 percent) and fitness activity trackers (15 percent)
• Smart home devices (24 percent), including smart thermostats (10 percent) and digital assistant devices such as Amazon's Echo (6 percent)
• Connected or digital toys (11 percent)
• VR headsets (10 percent); with several tech companies introducing VR headsets to the market, CTA projects sales of 700,000 during the holiday season
• Drones (9 percent), with projected sales of about 1.2 million units this holiday season (up 112 percent over 2015)

While the 2016 holiday shopping season is shaping up to be a record-breaker in terms of both overall retail spending and tech purchases specifically, some consumer apprehension remains. Among consumers who report planning to spend less on gifts this holiday season, the reasons cited include not having the money (60 percent), increased cost of living (57 percent) and fixed income (54 percent). Additionally, 38 percent cite concerns about the presidential election outcome among reasons they plan to spend less this season.

"The holiday shopping season has been steadily creeping earlier and earlier into the year, but we expect to see a delay in the barrage of holiday promotions this year until after the presidential election," DuBravac said. "Given uncertainty among voters, this election will impact not only when consumers begin to shop but, potentially, how much they spend."

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