This holiday season, online sales are poised to grow in the range of 14% to 18% compared with 2018, according to Deloitte’s annual holiday retail projections, which were released Tuesday. If the forecasting proves correct, that would be more robust growth than the 11.2% jump in online holiday sales that the consulting firm estimated.
Deloitte expects ecommerce sales to hit $144 billion to $149 billion during the holiday period, which it defines as November through January. This would be up from $126.4 billion spent online in 2018, according to Deloitte’s estimates.
Total retail sales also will pick up from last year, with sales climbing between 4.5% and 5.0%, up from 3.1% in 2018, according to the firm’s figures. If that rate holds true, that would mean total retail sales would likely exceed $1.1 trillion this winter, up from $1.09 trillion last year, Deloitte’s economists say.
Strong growth expected after challenging holiday lead-up in 2018
The projected seasonal increase for 2019 is a byproduct of a challenging lead-up to the holidays last year, says Daniel Bachman, Deloitte’s U.S. economic forecaster. The government shutdown, an uptick in consumer savings and a sharp stock market decline likely all hit the economy last December, leading to lower growth during the period, he notes. With lower-than-expected holiday sales last year, 2019’s forecast predicts a strong growth rate in comparison to what Deloitte registered as more modest gains in 2018.
After the 2018 holiday season wrapped up, Internet Retailer estimated online shoppers spent 17.4% more than the previous November through December period. But the market analysis was conducted before the U.S. Department of Commerce released their delayed year-end numbers, and December’s lackluster performance left some economists back-pedaling on earlier, more optimistic projections. Data from research firm Adobe Inc. pointed to a similarly healthy online growth for the same months at 16.5% in 2018. Adobe’s figures are based on data from more than 1 trillion visits to retail sites over the trailing 12 months, and Adobe Analytics measures transactions from 80 of the top 100 U.S. online retailers.
Economic indicators point to shoppers being primed to spend this holiday season
Deloitte’s predictions for “consistent” seasonal growth in 2019 are anchored by the current health of the labor market, near record-low unemployment rates and continued monthly job creation—all of which typically encourage consumers to spend more around the holidays, Bachman says.
“The economy is still growing, albeit at a slower rate,” he adds. “We continue to see consumer confidence elevated, which also helps boost holiday spending.”
Retailers across channels should anticipate a strong holiday season based on growth in consumer disposable income and spending indicators, according to Rod Sides, vice chairman for Deloitte LLP and U.S. retail and distribution sector leader.
“Retailers continue to improve customer experience, invest in the fundamentals and leverage relationships with innovative startups to boost engagement and efficiency,” he says. “But convenience is the new retail currency. Retailers who offer seamless experiences, have products available and can deliver items more quickly than ever are most likely to win this holiday season.”
Even using Deloitte’s most conservative projection for online sales in 2019, ecommerce’s share of total retail sales would hit 13.1%, up from 11.6% last year. In 2018, Internet Retailer estimated web penetration at 15.2% during just Cyber 5, the five-day, promotion-heavy period over Thanksgiving weekend through Cyber Monday.Favorite