By Christine Kern, contributing writer
Deloitte Forecast: Retail holiday sales should jump4 to 4.5 Percent, and ecommerce 18 to 21 percent.
Santa is likely to deliver on what retailers really want this year, as retail holiday sales should rise a healthy 4 to 4.5 percent over last year's shopping season, according to Deloitte's annual retail holiday sales forecast. Additionally, Deloitte forecasts an 18 to 21 percent increase in e-commerce sales in 2017 compared with 2016. E-commerce sales are expected to reach $111 to $114 billion during the 2017 holiday season.
Deloitte's retail and distribution practice expects total holiday sales (seasonally adjusted and excluding motor vehicles and gasoline) to reach $1.04 to $1.05 trillion between November and January.
"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 percent over the year to the holiday period, and we may see that rise to a range of 3.8 to 4.2 percent this season. Consumer confidence remains elevated, the labor market is strong and the personal savings rate should remain stable at its current low level."
Of course, potential uncertainties could also affect income growth and blunt the projected figures. These include an increase in the savings rate that would cause spending to expand more slowly. Additionally, Deloitte warns, the threat of a government debt ceiling crisis could also cut employment and income growth. And the impact of the unusually active hurricane season could potentially either depress spending or increase it, particularly in the home improvement sector, due to rebuilding activity.
"Sentiment and spending indicators are firing on all cylinders, but the question is: How will retailers respond given the profound disruption across the industry?" said Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader. "The good news is retail is thriving, and it is the proliferation of new, niche retailers that is resulting in share constantly changing hands. Consumers have unlimited alternatives and often bounce between brands, touchpoints and influencers, making it more difficult for retailers to attract shoppers without some level of customization. These disruptive factors are likely to combine to create a highly competitive and promotional holiday season. “
Sides asserts, “Retailers should modify their assumptions about what drives traffic, engagement and holiday sales growth, and realign around customer experience, creating relevant, emotional and inspirational connections that go beyond just product, price and assortment."