Consumers will go online, via computers and mobile devices, a lot more this holiday season to research purchases, but then only buy a little more than last year, according to Deloitte’s annual retail holiday sales forecast.
Total retail sales during the holiday period of November through January are expected to grow more slowly than last year, increasing 3.5-4% to reach a projected $961 to $965 billion, but digital interactions will help fuel the growth,
Nonstore sales, which are online and through mail-order channels, will increase an estimated 8.5-9% during the holiday period, a slower growth rate than the 12-15% of last year according to Deloitte. It did not provide dollar amounts for those sales.
“We’re expecting a fairly modest holiday season,” says Rod Sides, vice chairman of Deloitte LLP and retailer and distribution sector leader. “What’s driving that is personal disposable income was flat in the first part of year.” In 2014, total retail sales during November through January grew 5.2% to a seasonally adjusted $928 billion, excluding autos and gasoline, according to the U.S. Commerce Department.
Digital interactions will influence 64%, or $434 billion, of retail store sales this holiday season, up from influencing 50%, in 2014, according to Deloitte. “That’s an exponential curve we’re on,” Sides says.
“Online sales continue to be a growth channel, but more importantly, we’ve passed the tipping point where online and mobile engagement play a greater role generating sales in the physical store—where more than 90% of retail sales occur—than in digital channels alone,” Sides says. “The notion of channels has blown up. A consumer might buy online and pick up in store or purchase in store and ship to home.”
Deloitte’s research finds about 80% of shoppers say they engage with a retailer or brand through digital channels before going to a store. “Retailers that are likely to come out ahead this holiday season are the ones connecting the dots between their digital channels and their stores, rather than focusing solely on the online ‘Buy’ button,” Sides says.
Also being redefined: the holiday shopping season. Consumers are spreading their purchases across more of the calendar year.
“Black Friday events and promotion periods are extended and spending is spread out over a longer period of time,” he says. “Also, consumers are moving to things that are more experiential, like travel. Classic holiday spending [on goods] is falling by the wayside. That’s new status symbol: Where did you go for the holidays?”