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Holiday season sales are expected to be ecommerce driven

October 7, 2014

Two recently published reports on consumer spending agree that ecommerce will play a significant role in this year's holiday sales. 

Two retail reports recently published agree that Internet retail and ecommerce will play a significant role in this year’s holiday season sales. The two reports disagreed on consumer spending forecasts however. The National Retail Federation industry group mentioned a 4.1 percent increase in total retail spending while PricewaterhouseCooper’s U.S. retail and consumer practice forecast a 6.9 percent drop in average household spending, reported Internet Retailer.

Online division of the NRF, Shop.org, forecasts that Internet sales will increase by 8 – 11 percent this year up to $105 billion. PwC group also reported that 43 percent of holiday gift spending will be from online sales – results based on a survey of more than 2,2000 consumers across the country.

Best year for retail spending in a decade
If NRF positive forecasts are correct, total retail spending during November and December would amount to $616.9 billion. If that figure is reached, it would be the first time since 2011 that the holiday season sees an increase in sales of more than 4 percent. President and chief executive of the NRF, Matthew Shay, believes that this will be the best season in ten years.

“November and December look very, very good right now. If our estimates are correct it will be the best [season] going back a decade,” said Shay, according to the news source.

Shay’s opinion is that the economy in general is doing well this year and that there seems to be demand from consumers to spend. Based on retail spending over the last few months, retailers are poised to have a good season.

Shay highlighted that the anticipated boost in sales would increase stock as well as add an additional 725,000 to 800,000 seasonal workers to retailer locations, reported Breaking Finance News. 

“We’re at a good jumping-off point as we head into the holiday season,” Shay added.

The report by PwC explored economic and price factors. Consumers were divided in two groups based on household income. According to their research, average household spending on gifts will be $684, down from $725 a year prior. According to their survey, 72 percent of consumers did not find the economic environment to be improved, reported Internet Retailer.

The PwC report also found that online research would be an important part of consumer shopping behavior. Consumer research suggested that 49 percent of consumers would search online and purchase items on Thanksgiving morning.

“2014 could be the turning point when consumers make online pre-planning an integral part of their holiday shopping tradition,” the report said, according to the news source.

It is interesting that the two reports disagree on sales growth for the holiday season, but it is consistent in both that ecommerce will play a major role in this year’s sales figures.

Deals will help inspire increased sales for the holiday season 
With the recent rise in retail sales over the past few months and the anticipated increases in the workforce, the indicators seem to point toward a healthy shopping season. Retailers will offer competitive pricing and exclusive products to accommodate consumer interest over the next few months. Analysts believe that increased spending during the holiday season will be bolstered by consumer confidence, largely inspired by good deals, reported Breaking Finance News.

In anticipation, retailers need to make sure that their product inventory is up-to-date. Additionally, online marketing campaigns could serve to direct more traffic to websites and promotions may be what it takes to close the deal with many customers.

As Internet shopping becomes more popular, activity in physical retail locations may no longer be the best way to observe consumer behavior and trends. This holiday season will be a good indication of where the retail industry as a whole stands in terms of consumer spending.

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