Holiday retail sales forecasts are rolling in, and online sales are projected to grow between double and quadruple the rate of total sales.
Non-store sales are expected to increase 7-10% year over year to as much as $117 billion for the 2016 holiday season of November and December, the National Retail Federation said Tuesday. Non-store sales are those made mostly online but include sales via phone and catalog. Online holiday sales increased 9% during the 2015 holiday season, beating the NRF’s 6-8%projection.
Total holiday retail sales, including e-commerce, are projected to increase 3.6% year over year, to $655.8 billion, the NRF says. Total sales exclude autos, gasoline and restaurant sales. Holiday sales increased 3.0% in 2015, below the NRF’s 3.7% projection. NRF’s holiday sales forecast is based on an economic model using several indicators including consumer credit, disposable personal income and previous monthly retail sales releases.
“All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season,” NRF president and CEO Matthew Shay says. “This year hasn’t been perfect, starting with a long summer and unseasonably warm fall, but our forecast reflects the very realistic steady momentum of the economy and industry expectations.”
Meanwhile, Deloitte’s retail and distribution practice expects e-commerce sales to reach $96 to $98 billion during the 2016 holiday season (November through January), a 17-19% increase from the same period in 2015. Total holiday sales (excluding motor vehicles and gasoline) are forecast to exceed $1 trillion, up 3.6-4% compared with the year-ago period, Deloitte says.
Research firm eMarketer Inc. projects e-commerce will grow 17.2% to $94.71 billion this holiday season, which it defines as November and December, and account for 10.7% of total sales during that period. Total retail sales will increase 3.3% over the same period last year to $884.50 billion, eMarketer says.
Deloitte says digital interactions—meaning the use of desktop, laptops, tablets and smartphones—will influence 67%, or $661 billion, of retail store sales this holiday season. Digital influence includes, for example, shoppers researching products before buying them in stores, consumers ordering online and picking up merchandise in a store or a store associate placing an online order for an out-of-stock item and shipping it to a customer’s home.
“The trend to watch is the way that online, mobile and store channels influence each other,” says Rod Sides, Deloitte LLP vice chairman and retail and distribution sector leader. “Large e-commerce players and digital platforms such as Facebook and Pinterest are shaping what people think a great shopping experience is—a fast, highly-curated assortment with access to visuals, information and buying sources. Since these bigger platforms are more connected to the customer than the tradition retailer, it is important that they are part of retailers’ digital marketing campaigns this holiday season,” he says.
The biggest competition for retailers doesn’t come from big-box stores or leading e-commerce retailers, Sides says. “It’s likely to be the small and midsized retailers that focus on niche products and experiences. This group has been collectively stealing share from large, traditional retailers to the tune of $200 billion in annual sales over the last five years,” he says.
“The retailers that compete on differentiated products and experiences should be better positioned to outperform those who try to compete on low-price, value and convenience, or continue to rely on conventional sales events and promotions,” Sides says.