Retailers and e-tailers, I hope you’re ready because 2021 promises to be the biggest year for retail sales in years.
On Wednesday, February 24, the National Retail Federation (NRF) released its annual forecast for the year ahead—and it’s an extraordinary one—anticipating retail sales growth between 6.5%-8.2%. The NRF says as more Americans get vaccinated, and the economy sparks back to life, retail revenues will top $4.33 trillion.
Online sales (which are part of the $4.33-$4.4 trillion predicted) are likely to grow between 18%-23%, hitting $1.14 trillion to $1.9 trillion (topping a trillion dollars for the first time).
NRF president and CEO Matthew Shay says, despite the “continuing health and economic challenges” COVID-19 wrought, they’re “very optimistic healthy consumer fundamentals, pent-up demand, and widespread distribution of the vaccine will generate increased economic growth, retail sales, and consumer spending.”
Retailers, he notes, “have gone above and beyond even the most conservative safety guidelines to protect and serve their associates and consumers alike.” That is key to the recovery—both retail employees and customers need to feel comfortable going in the store.
The NRF is optimistic about the overall economy as well, expecting it to add 220,000-300,000 jobs a month as we head into the 2nd and 3rd quarters of 2021.
And 2020 retail sales surprised everyone, with retail sales boasting growth of 6.7% over 2019, to $4.06 trillion, almost doubling the originally projected growth of 3.5%–and that’s in the middle of a global pandemic. This unexpected growth was, no doubt, driven by online sales, which soared 21.9% in 2020 to $969.4 billion.
Holiday sales (November 1-Dec 31) accounted for 19.4% of 2020’s retail sales, coming in at “an unexpectedly high 8% to $787.1 billion, with online sales growing 22.6% to $206.9 billion.
NRF chief economist Jack Kleinhenz says they expect “accelerated growth” to start mid-year, and “the economy is expected to see its fastest growth in over two decades.” And Kleinhenz expects the service sector, which normally accounts for 70% of consumer spending, will bounce back as well.
Consumers have become “attached to the convenience and product selection of buying online,” which means you need to maintain a robust e-commerce website and continue to offer BOPIN (buy online, pickup in-store) and curbside pickup options.