The season for gift giving is fast approaching, and retailers from hometown America to online retailers way out in cyber space are looking for the gift of increased sales and black ink bottom lines. The 2017 holiday selling season was the biggest and best since 2011. Sales in the U.S. grew 5.5% in brick and mortar sellers over previous years and eCommerce tallied a 17.8% increase in online sales. Last year’s record performance has prognosticators either cautiously optimistic or pie-in-the-sky giddy over the coming 2018 holiday season.
Due to very good economic news, record low unemployment and strong consumer confidence, retailers are in line to receive a favorable uptick in sales in 2018. Deloitte Touche Tohmatsu Limited (Deloitte), a leading global consulting agency, says this year’s retail November to December sales could top $1.10 trillion, an increase over 2017’s $1.05 trillion performance. “We think most retailers will have a good holiday season if they have a distinctive value proposition,” says Rod Sides, vice chairman of Deloitte’s U.S. retail and distribution practice. “We think off-price will continue to do well, and there will be a rebound in luxury.” eCommerce sales are expected to rise as much as 22 percent through the holidays, according to Deloitte.
Global consulting firm AlixPartners is being a bit more measured in its sales predictions for this year, calling for retail sales growth of just 3.1 to 4.1 percent this holiday season. “The health of retail is still very strong, but 2017 will be a tough year to follow,” said Roshan Varma, a director in AlixPartner’s retail practice. “Last year was a bit of an anomaly, and we are expecting more of a typical holiday season this year.” Meanwhile, The National Retail Federation (NRF) is positioning its predictions more centered in the bell shaped statistical curve.
The NRF is forecasting an increase in retail sales of 4.3 to 4.8 percent over last year, resulting in as much as $720.89 billion dollars in holiday sales. “Our forecast reflects the overall strength of the industry,” NRF President and CEO Matthew Shay said. “Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.” NRF Chief Economist Jack Kleinhenz said, “Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected. With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy. The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend.”
Regardless of which numbers prevail, consumers are tiring of the shopping experience and will be looking for convenience when it comes to browsing. They will be rewarding retailers who provide improved checkout times when making their purchases; whether in store or online. Early shopping (Thanksgiving through Cyber Monday week) will garner 37 percent of total U.S. holiday retail sales. Consumer sales made through mobile devices will account for more than $35.9 billion in the United States, with voice command technology accounting for 3.3 percent of total gift-giving purchases.
Happy holiday sales to all!