Consumer Nation

It Won't Be A Year Without A Santa: Deloitte Sees Holiday Sales Up 2%


If Deloitte's forecast is correct, retailers may see some of their holiday wishes come true this year, especially if they have the right e-commerce strategy.

Shoppers in London's West End are reflected in a Christmas tree decoration.
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The consulting firm's retail group released their Christmas holiday survey, and predicted a modest increase in holiday sales this year, with total sales expected to rise 2 percent to $852 billion during the November through January period. Their measure, which excludes motor vehicle and gasoline sales, compares with a 1 percent gain during the same period last year.

Although better than last year, the forecast still means retail sales will be below average historical gains.

Deloitte's Chief Economist Carl Steidtmann expects the recent weakness we've seen in the housing market, coupled with a still-weak labor market to weigh on consumer spending.

"Consumers' discretionary funds have dwindled as households remain focused on reducing debt and increasing their savings, while banks continue to limit access to credit and stimulus checks have run out," Steidtmann said.

Lower energy prices or bigger stock market gains could improve spending, he said.

But, as we have been seeing in recent months, there could be a big divide between retailers.

Who wins?

It just may be the retailers with effective online and mobile commerce strategies, according to Alison Paul, vice chairman and Deloitte's retail sector leader in the U.S.

Deloitte's forecast calls for non-store sales to rise 15 percent during the holidays. Nearly two-thirds of that segment comes from online sales, the rest from catalogs and interactive TV.

If this proves true, it would be a continuation of a trend we have seen throughout the year. Online sales have been growing fast, and—while the number remains very small—traffic to mobile commerce sites is growing very robustly.

One reason is that consumers are getting smarter. With money tight, no one wants to overpay for a purchase, and researching prices online is becoming a more common practice.

"The convenience and functionality that have fueled e-commerce gains in previous seasons will continue to draw consumers online to do their shopping this year," Paul said.

She also expects social networks and mobile applications to play an even more prominent role in the shopping process.

We've already seen retailers rushing to roll out applications ahead of the holiday season. For example, we recently spoke with Blue Nileabout theirdiamond shopping iPhone application. The online jewelry retailer expects to have another app specifically geared to their jewelry gift items up and running in time for holiday shopping.

Retailers are likely feeling a bit more confident this year. Yet another survey has come out saying that retailers are planning to increase their seasonal hiring.

The latest survey, which is from Challenger, Gray & Christmas, said retailers will likely wait until later in the season to do their hiring. That was a similar observation to what the Hay Group found.

Both Challenger and Hay do not expect seasonal hiring to reach pre-recession levels.

One thing that will help retailers who are hiring is that they will have a big pool of candidates to pick from as unemployment remains above 9 percent.

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