By ,
Published January 13, 2015
As U.S. retailers gear up for what they hope will be a hot start to the key holiday shopping season, this year's "must-have" buys seem largely unclear.
While the standard wish list remains predictable — cashmere sweaters, digital cameras, jewelry and toys — industry analysts are divided over what, if anything, is likely to emerge as this year's No. 1 seller.
Stand-out candidates so far are consumer electronics, according to several analysts, including Deutsche Bank's retail specialist Bill Dreher.
"There is a commoditization of the digital revolution," Dreher said. "We're seeing home theaters and smaller flat-screen TVs and MP3 players and laptop computers."
He called the $398 Hewlett-Packard Co. (HPQ) laptop computer — expected to go on sale Friday at Wal-Mart Stores Inc. (WMT) — "an amazing value."
A hot item launched this week is Microsoft Corp.'s (MSFT) Xbox 360.
The hot status is a mixed blessing, however. Retailers have reported widespread sell-outs on the system, which is the first from a major console maker in four years.
The new Xbox sells for $400, with a "core unit" — faulted by some hard-core gamers because it lacks a hard drive to let it play older games — going for $300.
Legg Mason analyst Richard Jaffe takes a different view, saying "electronics lack the sizzle of prior seasons."
In a note to clients, Jaffe wrote: "MP3 players, including the ubiquitous iPod, are no longer an exciting novelty. DVD players are now a commodity ... the flat-screen frenzy has tapered significantly."
Nevertheless, accessories for iPods and other MP3 devices are expected to be key sellers.
"Speakers and musical toys that play with the iPod are going to be very hot this holiday season," said Toys R Us Inc. president John Barbour, adding that "a new video game platform like Xbox 360 ... is going to be the must-have for many kids."
For younger kids, the hot seller has yet to emerge.
Since Mattel's new plush Elmo "Knows Your Name" interactive doll is not likely to enjoy the same popularity as its 1996 "Tickle Me" predecessor, electronics are also seen as the likely draw for tech-savvy children.
"There is going to be something" that will become the hot seller this year, says Harris Nesbitt toy industry analyst Sean McGowan, but "I just don't know what it is."
Apparel will likely play second-fiddle to other categories when it comes to gift giving, said Kurt Barnard, head of consultants Retail Forecasting Group.
"Last year's color palette was a good one," he said, citing the pinks and corals that were popular in 2004. "But this year's neutral and dark colors are not exactly sale-inspiring."
Instead, Barnard is betting on jewelry and accessories.
"Everyone already has a closet full of clothes," he said. "But what a scarf and a handbag can do for a 3-year-old wardrobe is amazing." Popular jewelry and accessory brands include Tiffany & Co Inc. (TIF), Coach Inc. (COH), and Guess? Inc.
Wendy Liebmann, founder and president of the retail consulting firm WSL Strategic Retail, said a recent survey revealed that 53 percent of women and men around the United States said they will spend less on holiday gifts this year compared with 2004.
What's more, she said 65 percent of them said this is because "there is nothing new and interesting to buy."
"This is the perfect reflection of the mind-set of shoppers heading into this new decade," Liebmann wrote in a recent newsletter.
Citing factors including the war in Iraq, the recent natural disasters, the bird flu scare, higher interest rates and even the new Medicare prescription benefits plan, Liebmann forecast that consumers will only go into debt for new items that are "discernibly different" from what they have.
Barnard echoed her caution, noting that U.S. consumers have yet to taste the increase in their home-heating bills, which are expected to be 20 percent to 30 percent greater than they were last winter, due to higher oil prices.
But as for this year's must-have holiday item, Barnard said, "You will never find that any one particular category towers over another. It is almost always a mixed picture."
https://www.foxnews.com/story/no-clear-must-have-gift-on-shopping-lists