Modest holiday sales increase predicted

Sept. 27, 2012

Research by global consulting firm Deloitte LLP indicates a modest increase should be expected for holiday sales this year, though the still-sluggish state of the U.S. economy will act as a brake on overall shopping activity.

Deloitte's retail & distribution practice expects total holiday sales to climb to between $920 billion and $925 billion, representing a 3.5% to 4% increase in November 2012 through January 2013 holiday sales over last season – monies that exclude spending on motor vehicles and gasoline. 

This growth rate, however, is below the 5.9% gain recorded during the 2011-2012 holiday season, noted Carl Steidtmann, Deloitte's chief economist.

"Economic headwinds nagging consumers this fall include stubbornly high gasoline prices that continue to creep up and soft housing and job markets," he said. "While consumers turned out in the summer to give retailers solid gains for a few months, that pace may be difficult to sustain through the end of the year. However, retailers may benefit from a post-election consumer spending boost."

Additionally, Deloitte forecasts a 15% to 17% increase in non-store sales, with nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive television. 

"Non-store sales continue to outpace overall growth, but increasingly influence consumers' experience with the retail store, from trip planning, to in-store product research, and post-purchase reviews and sharing," pointed out Alison Paul, vice chairman for Deloitte and the retail & distribution division’s leader. "This holiday season, retailers' most lucrative customers may be the ones they engage across physical and virtual storefronts."

Paul also noted that consumers might also consolidate or reduce trips to the store in response to higher gas prices. Conversely, she added, consumers are expected to keep a sharp eye on promotions and pricing, making retailers' digital connections with consumers before and during each shopping trip even more critical this year.

"This year, we anticipate retailers will come to the starting gate with true ‘omni-channel’ pricing strategies, as opposed to disparate or reactionary strategies of the past," Paul said. "Consumers should see more price transparency across mobile, online and store channels, and retailers will use these same channels to gain insights into their core customers' behavior. Retailers that interpret and respond to real-time information about shoppers can hit the right notes on pricing and promotions that drive traffic without eroding margins."

Deloitte also anticipates that retail store sales influenced by “mobile technology” will account for 5.1%, or $36 billion, in retail store sales this year during the holiday season – driven by smartphone activity such as product research, price comparison or mobile application use. 

Recent research from Deloitte indicates that shoppers armed with smartphones are 14% more likely to make a purchase in the store than those who do not use a smartphone as part of their in-store activity.

About the Author

Sean Kilcarr | Editor in Chief

Sean Kilcarr is a former longtime FleetOwner senior editor who wrote for the publication from 2000 to 2018. He served as editor-in-chief from 2017 to 2018.

 

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