Deloitte Predicts 4% Increase In U.S. Christmas Season Retail Sales

By Christine Kern, contributing writer

E-Commerce Sales Should See 13.5% Gains over 2013

Deloitte anticipates that U.S. holiday retail sales for 2014 will increase by between 4 percent and 4.5 percent year on year to between $981 billion and $986 billion. Additionally, Deloitte predicts that non-store retail sales, including ecommerce and mail order, will rise between 13.5 percent and 14 percent.

The expected rate of sales growth is a moderate improvement over the 2.8 percent gain in 2013, according to Deloitte.  Retail sales between November 2013 and January 2014 (not seasonally adjusted and excluding automotive and gasoline) totaled $944 billion according to the U.S. Commerce Department.

"Income, wage and job growth are positive indicators heading into the holiday season," said Daniel Bachman, Deloitte's senior U.S. economist. "Debt levels remain at historical lows, and stock market gains coupled with increasing home prices have a wealth effect on consumers, which may encourage increased spending compared with prior years. Although consumers are watching tensions unfold in the Middle East and Ukraine, the improvement in their economic situation should more than offset the foreign conflicts' impact on consumer confidence and retail sales. Despite recent events in energy-producing areas of the world, gas prices have held steady, which may also sustain consumers' spending power."

Deloitte also forecasts a 13.5 to 14 percent increase in non-store sales in the online and mail order channels during the 2014 holiday season.

Alison Paul, the vice chairman of Deloitte, added, "While online sales continue to climb, digital customer interactions through both virtual and physical store channels present greater sales opportunities than online or mobile commerce alone. Our research indicates that 84 percent of shoppers use digital tools before and during their trip to a store.  Additionally, those shoppers convert, or make a purchase, at a 40 percent higher rate than those who do not use such devices during their shopping journey."

Deloitte forecasts that digital interactions will influence 50 percent, or $345 billion, of retail stores sales this holiday season, a figure that reflects the extent to which  the use of desktop and laptop computers, tablets, and smartphones influence brick-and-mortar store sales.    

Digitally-influenced store sales are estimated based on Deloitte's digital influence factor (The New Digital Divide, April, 2014) applied to forecasted retail (store) sales for November 2014 through January 2015, based on U.S. Commerce Department retail sales data.  Deloitte's analysis of digitally-influenced sales exclude motor vehicle and parts dealers, non-store retailers (which include electronic shopping and mail-order houses), and food services and drinking places.

Paul noted, "Retailers should focus on the right functionality, rather than more functionality, when creating digital experiences this holiday season. Rather than offer their full e-commerce site on a mobile device, for example, retailers may be more effective by helping consumers compare prices, scan through local assortments, and navigate the store. Retailers that better understand how consumers make purchasing decisions, then deliver tools that support that process in a way that is consistent and complementary across online, mobile and store channels — may have the advantage this holiday season."