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Holiday sales to grow as much as 4%

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Deloitte is forecasting holiday sales will increase between 3.5% and 4% as the economy's health and the presidential election take center stage among consumers this fall.

Despite some distractions this year, retailers should expect a modest increase in 2012 holiday sales, according to Deloitte’s annual holiday forecast release Tuesday morning.

"Economic headwinds nagging consumers this fall include stubbornly high gasoline prices that continue to creep up and soft housing and job markets," said Carl Steidtmann, Deloitte's chief economist. "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. Consumers and businesses alike may pause in advance of the election; however, retailers may benefit from a post-election consumer spending boost."

Deloitte's retail and distribution practice expects total holiday sales to climb to between $920 and $925 billion, representing a 3.5% to 4% increase in November through January holiday sales when compared to last year. While that is a respectable increase, it is below last year’s growth rate of 5.9%.

Additionally, Deloitte forecasts a 15% to 17% percent increase in non-store sales, which is primarily attributable to ecommerce. Nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive TV. 

"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," said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. "This holiday season, retailers' most lucrative customers may be the ones they engage across physical and virtual storefronts."

Paul 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," said Paul. "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 forecasts that mobile-influenced retail store sales will account for 5.1 percent, or $36 billion, in retail store sales this year as consumers increase store-related smartphone activity such as product research, price comparison or mobile application use.   

"Retailers that welcome the smartphone shopper in their stores with mobile applications and wi-fi access, rather than fear the showrooming effect, can be better positioned to accelerate their in-store sales this holiday season," said Paul.

The firm’s recent research shows 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 journey.

"The mobile channel is a powerful customer engagement tool, enabling retailers to capture a shopper's attention at the point-of-purchase, while gleaning valuable information about shopper behavior regardless of the shopper's location," Paul said.

 

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