Analysts predict holiday sales that will make retailers jolly
A strong national economy, low unemployment and booming consumer confidence are expected to propel holiday sales to a record high this year, industry analysts said.
Retail sales in November and December could reach more than $720 billion nationally this year, an increase of nearly 5 percent from the same period last year, according to the National Retail Federation, a trade group in Washington. That growth is significantly above the recent average of about 4 percent a year.
“We’re entering this holiday season with a lot of positivity,” said Jill Standish, senior managing director for the global retail division at Accenture, a consulting firm. “When the economy is strong, consumers on average are going to spend more.”
Traditionally, the holiday shopping season kicks off in early November leading up to Black Friday weekend, among the busiest retail days of the year. But some retailers, hoping to get a jump on the competition, began marketing for the holidays in October. Christmas displays were already up in some stores, such as Lowe’s and Home Depot, well before Halloween.
Launching holiday sales in October pays off for retailers, since early shoppers tend to spend $370, or 28 percent, more than those who start shopping later, according to Deloitte, a New York accounting and consulting firm. But the majority of American families still plan to do most of their Christmas shopping between Nov. 16 and 30, and spend an average $1,536 this holiday season, up from $1,226 last year.
“Black Friday and Cyber Monday are still big days for retailers, but if you can get out there earlier, capture people and raise foot traffic, it helps to drive spending,” said Jeff Buhr, a partner and retail expert with Deloitte Houston.
The top gifts include clothing, electronics, toys and home goods. As Christmas draws closer, gift cards and books — popular last-minute gifts — are expected to spike, said Marissa Tarleton, the chief marketing officer for Retail Me Not, an online
discount business that connects retailers with 20 million monthly users.
American consumers are increasingly purchasing “experience” gifts, such as a entertaining at home, concert tickets, cooking classes or spa treatments. Nearly half of the 1,500 respondents to Accenture’s holiday retail survey this year said they plan to purchase experiential gifts, an increase of 5 percentage points from last year. By
comparison, three-quarters of respondents said they plan to purchase regular gifts, a decline of 11 percentage points from last year.
“A lot of gift-giving this year will be in travel, theater and restaurants,” Standish with Accenture said.
About half of the 4,036 respondents to Deloitte’s holiday retail survey this year said they plan to purchase a gift for themselves for Christmas, an increase of 15 percentage points from 2014. Popular gifts for those giving themselves a present: food, liquor, clothing
and shoes.
Although the majority of holiday shopping still will occur in brick-and-mortar stores, more holiday spending will continue to migrate online. Adobe, a national research firm, predicts online holiday sales will reach a record $124.1 billion this year, a 15 percent increase from last year. By comparison, brick-and-mortar spending is expected to rise by only about 3 percent.
Most of the online spending for the holidays will occur between Thanksgiving Day and Cyber Monday, according to Adobe. Electronics,
such as 4K televisions and video games, are expected to sell well online. About 17 percent of shoppers said they plan to buy gifts on social media, according to Accenture, prompting some retailers to reach out to consumers through Instagram and Pinterest.
Retailers benefit from offering a so-called omnichannel experience, allowing shoppers many ways to shop in-store and online, industry analysts said. Retailers with both physical and digital storefronts saw a 28 percent increase in sales over solely e-commerce retailers, according to Deloitte.
“Most of the online-only retailers are opening brickand-mortar stores,” said Buhr, the Deloitte partner. “Even Amazon is doing it. They’re realizing that there is a lot of power in having a physical presence to give shoppers inspiration.”