E-commerce sales for the 2017 holiday season are projected to grow 18%-21% compared with the 2016 holiday season, with online sales reaching $111 billion to $114 billion, according to the just-released Deloitte annual holiday forecast.
Deloitte, which defines the holiday season as the three-month period of November through January, attributes this large increase to several factors, including growth in consumers’ personal income. Disposable income for the 2017 holiday season is predicted to increase 3.8% to 4.2% compared with a 2% increase in disposable income during the same time last year. Higher consumer confidence, a strong labor market and a low personal savings rate all contribute to the uptick in holiday sales, says Daniel Bachman, Deloitte’s senior U.S. economist.
Last year, e-commerce holiday sales grew 14.3% year over year to $93.8 billion, according to Deloitte. That was short of the consulting firm’s 17%-19% projections for the 2016 holiday season.
“We continue to see e-commerce growth accelerate as more people head online, but that’s not to say brick-and-mortar isn’t growing as well,” says Rod Sides, vice chairman and U.S. leader of retail at Deloitte LLP.
Deloitte forecasts total retail holiday sales, including e-commerce, to increase 4.0% to 4.5% over last season, reaching $1.04 trillion to $1.05 trillion for the 2017 holiday season. The consultancy cites U.S. Commerce Department data that pegs total retail sales for holiday 2016 at $1.0 trillion.
“The lower total growth percentage reflects the fact that brick-and-mortar is growing from a larger base than e-commerce,” Sides says.
Deloitte also predicts that it will be a competitive and promotional holiday season, and retailers should market themselves as a unique brand in order to attract shoppers, Sides says.
“Retailers should modify their assumptions about what drives traffic, engagement and holiday sales growth, and realign around customer experience, creating relevant, emotional and inspirational connections that go beyond just product, price and assortment,” Sides says.
Deloitte isn’t the only company offering a rosy outlook for holiday e-commerce. Research firm eMarketer Inc. estimates e-commerce will grow 16.6% year over year this holiday season (Nov. 1-Dec. 31) to reach $106.97 billion.
EMarketer attributes the increase to growth in mobile commerce and competition between large retailers and online marketplaces.
Additionally, coupon aggregater RetailMeNot Inc. estimates a happy holiday shopping season for retailers and projects that 56% of shoppers will make a purchase on Cyber Monday (the Monday after Thanksgiving), up from 39% in 2016.
RetailMeNot’s data is based on internal data from 50,000 retailers and millions of consumers, a consumer survey of more than 1,000 U.S. consumers conducted in July and a retailer survey of 200 marketing decision makers conducted in May.
RetailMeNot’s study also finds:
- 58% of retailers are making online shoppers their main target of marketing for 2017, while 42% of retailers will focus their marketing more heavily on in-store shoppers.
- 79% of retailers will begin marketing for the holidays earlier than they did last year.
- 52% of retailers will begin their holiday season promotions in September or earlier.
- 77% of marketers plan to change their holiday marketing strategy from last year.