As the 2016 holiday shopping season kicks off, the trends to watch for include some that are a bit wacky.
HOT TOYS: This year's "it" toy: Hatchimals. When a child strokes the egg, it starts to hatch into a stuffed bird-like creature. The child's interaction with the pet trains it to play games and repeat words. Made by Spin Master, they run $59.99.
"If you have to pick one toy this year, this is it," said Jim Silver, editor-in-chief of TTPM.com, an online toy review site. "It's the whole excitement of the hatching process."
Other hot toys, he says: playthings related to PJ Masks, an animated preschool television series as well as new toys related to Nickelodeon's series "Paw Patrol." For grown-ups, a top item is the Nintendo New Classic, which has been selling out.
The U.S. toy business, which had a strong holiday season last year, is on track for another good one. U.S. toy sales are expected to increase 6.5 percent for 2016, with sales up 6 percent from January through September, according to the market research firm NPD Group Inc.
TACKY CHRISTMAS SWEATERS: There's not much sizzle in the overall clothing market. But one bright spot is tacky holiday sweaters. The trend — often ironic — has been growing for a while, but some stores think it's going to resonate with shoppers even more this year after a contentious presidential race.
"Everyone's looking for some comic relief," said Marshal Cohen, chief industry analyst at NPD Group Inc.
Wal-Mart Stores Inc. has increased its selection of ugly holiday sweaters, which feature motifs like Santas and holiday trees, and the fad has spread to vests and sweater dresses. J.C. Penney dramatically expanded its assortment too. Last year, its selection was primarily available for teens and it ran out early in the season, says company spokeswoman Daphne Avila. This year, the choices also include socks, ties, and hats for the entire family, Avila says. Target also has plenty of ugly holiday sweaters, but new this year are Santa pajama sets for the family.
LEAN INVENTORIES: Shoppers may not get the kinds of discounts they saw last year. Wal-Mart, Target, and others are heading into the holiday season with leaner inventories than a year ago. That could help prevent them from getting stuck with lots of holiday leftovers to clear. But it could be bad news for consumers.
One area where the pressure to discount is on is clothing. Teen merchant Aeropostale Inc., which has filed for bankruptcy protection, has launched deep sales as it liquidates its store inventory. John Morris, a retail analyst at BMO Capital Markets, says he believes the chain will be closing 300 locations, and that could affect pricing at other mall-based teen retailers like American Eagle Outfitters and Abercrombie's Hollister chain.
APP FATIGUE: Stores like Macy's and Wal-Mart have been improving their apps, and Wal-Mart is making its Black Friday circular available through its app for the first time. But some shoppers are getting choosier about which ones they make space for on their smartphones. Gartner research found that 41 percent of consumers polled have the same number of apps as a year ago, but 20 percent have reduced the amount as they prioritize the most useful ones. So that means stores will have to work hard to encourage shoppers to stay with their apps by adding special features and proving themselves indispensable.