Deloitte LLP said it expects retailers to see holiday sales growth of as much as 4.5%. Last year, total sales for the season climbed 3.6%.
Additionally, Deloitte forecasts an 18% to 21% increase in e-commerce sales in 2017 compared with 2016. E-commerce sales are expected to reach $111 billion to $114 billion during the 2017 holiday season.
“The projected uptick in holiday sales ties to four primary factors affecting consumer spending, starting with anticipated strong personal income growth,” said Daniel Bachman, Deloitte’s senior U.S. economist. “Last year, disposable personal income grew 2% over the year to the holiday period, and we may see that rise to a range of 3.8% to 4.2% this season. Consumer confidence remains elevated, the labor market is strong, and the personal savings rate should remain stable at its current low level.”
Elsewhere, the International Council of Shopping Centers (ICSC) forecasts 3.8% year-over-year growth in retail sales for this holiday season. Additionally, ICSC released its Holiday Shopping Intentions Survey showing that consumers expect to spend on average $728.40 on gifts and other holiday-related items.
The study pointed out that consumers continue to demonstrate their preference for making purchases through a variety of channels including in-store, online, and click-and-collect. In fact, 96% of shoppers plan to make a purchase from a retailer who has both a physical and an online presence, with 91% of shoppers buying at physical locations.
Other results found that holiday shoppers will take advantage of omnichannel retailers, with 40% of them buying online and picking up in-store; 81% of those shoppers plan to make additional purchases when collecting their item(s).
While November and December remain the anticipated busiest shopping months, ICSC saw an uptick in the number of people planning to shop before Thanksgiving at 66%.
“Our annual Holiday Shopping Intentions findings demonstrate that consumers are very optimistic this holiday season and that physical retail remains a cornerstone of the holiday season,” said ICSC president and chief executive officer Tom McGee. “The more agile retailers are in meeting consumers’ demands for the seamless convergence of physical and digital shopping, the more success they will see.”
McGee said that Millennials will play an integral part in this holiday season, with 92% planning to spend money in a physical store. On average, this demographic plans to spend $554.40 on holiday gifts and related items and will mostly use their debit cards or pay cash (54%) for those purchases. Millennials plan to take advantage of discounts on Black Friday (57%). Three-fourths of Millennial shoppers plan to spend online at retailers whose stores they also visited, and 50% of them will buy online and pick up in-store.
“Millennials are by far the biggest disruptor right now. They not only want experience but they want convenience as well, which we see in their intent to utilize both online and physical,” stated McGee. “The theory that they are a digital-only generation is simply not true; they want digital to be a part of their transaction rather than the entire transaction,” he concluded.
Additionally, the National Retail Federation (NRF) adjusted its initial forecast for retail sales for 2017, saying sales are now expected to increase between 3.2% and 3.8% rather than the 3.7% to 4.2% forecast earlier this year.
“Meaningful revisions to retail sales numbers by the Census Bureau and similar revisions to personal income and consumption by the Bureau of Economic Analysis have both affected our forecast and have required us to adjust our 2017 sales projection,” said NRF chief economist Jack Kleinhenz. “While weaker-than-expected spending in the first quarter along with decelerating inflation has also contributed to the revision, NRF anticipates stronger sales heading into the fall and holiday seasons.”