It is believed that holiday sales will be growing by four percent this year to $447.5 billion. According to the National Retail Federation (NRF), this represents the slowest holiday growth since 2002. In a holiday preview called “Hot or Not: A 2007 Holiday Preview,” the NRF’s Scott Silverman said that while this year’s holiday growth is expected to grow more slowly than in past years, it will still be up from 2002, when sales only grew by one percent.

“While this may not be the rosiest of predictions, this is certainly not a ‘sky is falling’ mentality,” cautioned Silverman. “Consumers will be more conservative in their holiday spending, but they will still be out shopping.”

Evening wear and diamonds will likely be driving sales in the fashion and apparel categories, and tailored denim products are also expected to be a hot item among men, women and children alike. Women’s boots will also help drive sales this holiday season, with a shift towards three-quarter length boots rather than knee length.

In a new twist, fashion will be getting more high tech this season. Dan Butlet, VP of retail operations and merchandising at the NRF said, “Technology is having an impact on fashion. Whether it’s sweaters or vests designed to hold handheld accessories and iPods, or handbags, which are designed for these devices, we are going to see a lot more of these kinds of products this season.”

Cell phone and iPod accessories will be popular products this year, including a new breed of accessories designed to hold these items at home. Expect to see more widescreen televisions being gifted this year, along with widescreen computer monitors, as the prices of these products have come down significantly.

Another popular gift this year will be gift cards. “Gift cards are growing in their purchase and acceptance and you are going to see [many] more retailers cross-promoting these, such as grocery stores selling Starbucks gift cards,” Butler said. “There is also a new trend in personalizing these gift cards with music and photos, and I think this will evolve.”

Consumers are expected to buy in the home category, despite the slow housing market. They will be buying for their own homes or as gifts for other people. Consumers are giving the impression of learning to live with the homes they have, since sales are down.

Also, you can expect retailers to be more patient this year and to start marketing later.
“Fewer retailers are setting up earlier this year as they have done in the recent past, in order to save the excitement for the holiday and to drive sales around this time,” Butler said. Interestingly enough, while Wal-Mart is not setting up as early, they are still letting consumers know about holiday toy pricing early.