Last Wednesday was the last day of Amazon Prime Day. Holding Prime Day in October, say some experts, impacts the entire holiday shopping season, since many retailers matched Amazon, holding big shopping events of their own.
By all accounts, this is going to be a tough holiday season for retailers, particularly small ones. More consumers will, obviously, be more comfortable shopping online. And shoppers are expecting discounts—and free shipping.
In its recent report, A Tale of Two Holiday Seasons, Deloitte forecast holiday retail sales would likely rise 1%-1.5% bringing in between $1,147 billion and $1,152 billion from November-January.
Deloitte has a rosier forecast for e-commerce sales, predicting they’ll increase 25%-35%, year-over-year, compared to 2019’s increase of 14.7%. Holiday e-commerce sales should total between $182 billion and $196 billion.
None of this is surprising “given the state of the economy,” according to Daniel Bachman, Deloitte’s U.S. economic forecaster, “While high unemployment and economic anxiety will weigh on overall retail sales this holiday season, reduced spending on pandemic-sensitive services such as restaurants and travel may help bolster retail sales somewhat.”
Deloitte says the “upcoming holiday retail season will be marked by unparalleled uncertainty.” Given this, Deloitte sees two possible scenarios for holiday sales:
1—a relatively stable year-over-year sales increase (0%-1%) indicating “consumers will continue to experience mounting anxieties, related to both their finances and health.”
2—a more significant jump (2.5% to 3.5%) which would take steadily increasing confidence among consumers.
Both forecast possibilities are lower than in past years and “will be driven by a K-shaped recovery.” In either case, says Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader, “For retailers, this season will continue to push the boundaries on the importance of online, convenience, the role of the store, and the criticalness of safe and speedy fulfillment.”