Thanks to cheaper gas, a better jobs market and some pent-up demand ready to be unleashed, this holiday season might be brighter than it has been in years.
Retail analytics firm eMarketer Inc. is forecasting a 5.7 percent total retail sales gain for the holiday shopping season, but the outlook comes with a twist: even as global e-commerce sales are pegged to rise 25 percent this year, U.S. online sales growth during the holiday period is expected to contract even as it takes a greater share of total sales.
The company said in its research report that total U.S. retail sales for November and December will increase to $885.7 billion, which is upwardly revised from a prior estimate of 3.2 percent. The gain represents the highest increase since 2011’s 6.3 percent growth rate.
EMarketer analyst Monica Peart said while U.S. retail “e-commerce holiday season sales growth will dip slightly this year to 13.9 percent versus 14.4 percent in 2014, the segment will play an increasingly important role this season.” The company said e-commerce will garner a 9 percent share, or $79.4 billion, of all retail sales this holiday – which is up from a 8.3 percent share last year.
Peart said results are expected to show a “healthy increase over what was experienced during the same period in 2014. This expectation is driven primarily by the fact that gas station sales, which make up roughly 12 percent of overall retail sales, dropped rather dramatically in late 2014. Increases in real income from wages, further decreases in unemployment and an increased willingness to spend in traditional retail categories that missed out on the windfall in gas prices earlier in the year should also drive growth.”
Peart said mobile devises will also take on a more important role this year. The analyst predicts mobile commerce sales to rise 32.2 percent for the year. “The biggest growth will come in smartphone retail m-commerce sales as consumers become more comfortable buying on their phones, which, on average, have larger screens than those released just a few years ago,” the report stated. “We estimate that by the end of 2016, 25 percent of all retail e-commerce sales in the U.S. will take place via mobile devices.”
Peart said as U.S. consumers warm up to “conducting a litany of activities with their smartphones, fewer people are putting down the phone to make a purchase using another device. Consumers are opting to complete their transaction with the same device they began the shopping journey with, and that is increasingly with a smartphone.”
Also noteworthy this holiday season is social commerce. EMarketer said all the prominent social media channels from Facebook and Pinterest to Instagram and Twitter have “shop” or “buy now” buttons. This year will be a test of the feature’s success – especially on mobile devices, Peart said.