Deloitte forecasts up to a 22 percent increase in e-commerce sales, online sales are expected to reach $128 to $134 billion.
There is consensus among analysts that e-commerce will spur holiday retail sales growth this year.
Forrester forecasts online sales to grow 13.5 year over year. EMarketer pegs e-commerce growth at 16.2 percent, while Internet Retailer is projecting 15.5 percent growth over last year. The most optimistic estimate comes from Deloitte, which expects to see 17 to 22 percent increase in e-commerce sales in 2018 compared with 16.6 percent in 2017. The firm expects e-commerce sales to reach $128 to $134 billion this year.
Strong economy, more online source usage. Daniel Bachman, Deloitte’s US economic forecaster, says,”The anticipated growth in holiday sales is likely because of solid disposable personal income growth, which we expect will be in the 5 to 5.4 percent range. That is above last year’s 4.7 percent.”
“A strong labor market should also aid retail spending, along with elevated consumer confidence and a stable personal savings rate of around 7 percent,” Bachman said.
Forrester also attributed its projected increase to increased consumer confidence and a strong economy, as well as other factors, according to Susan Wu, director of ForecastView at Forrester.
“Shoppers are using more online sources than ever: apps, wish lists, online gift registries, social media and blogs have all gradually grown over the past three years,” Wu said. “By contrast, traditional sources such as circulars, catalogs, direct mail, magazines, television, radio and inspiration within a retail store have all declined over the same period.”
Tech-enabled commerce investment. “Consumer sentiment and spending indicators provide a healthy outlook for retailers across channels with strong expectations for store-based and online retailers,” said Rod Sides, vice chairman, Deloitte LLP and US retail and distribution sector leader.
“We’ve seen retailers continue to advance their approaches to shipping, delivery, in-store experiences and tech-enabled commerce. That can include things like showrooms, interactive displays that replace sorting through racks with simple, easy selections or web-based visualization that lets people get a feel for the style, fit, and appearance from apparel to home decor. Voice-enabled shopping and shortened delivery times may also accelerate the competition around fast and easy purchasing options. The leading retailers this holiday season could be the ones who are able to strike the right balance between innovation, experience, and value that best engages the consumer and stands out in a busy season,” Sides said.
Some things to watch out for. Deloitte also pointed out that unknown variables might affect the forecast.
“Some of the impacts of Fed tightening could be felt before the end of the year,” Bachman said.”Some observers have speculated the stock market is overvalued. A significant decline in the market could push down consumer confidence and reduce household wealth, both of which would moderate the forecasted rise in retail spending.”
Indeed, the market has been had some serious fluctuations this month, with some analysts saying that this trend might continue.
Why you should care. Online and offline, the 2018 holiday season is looking to be the biggest one yet. The National Retail Foundation (NRF) forecasts a total increase in holiday retail sales of 4.3 to 4.8 percent over last year ($717.45 billion to $720.89 billion).
“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.”