The U.S. economy is putting up some impressive numbers: a headline unemployment rate of 3.7%, the lowest in half a century; strong job creation; rising wages; falling gasoline prices; and consumer confidence at levels not seen since 2000. Put these things together with the beginning of the 2018 holiday shopping season and what you end up with is a forecast for a shopping spree that could rise to the unheard of total of $1 trillion.
And that is what researchers at retail analytics firm eMarketer now project will happen this year. The firm estimates total retail sales of $1.002 trillion for the traditional November 1 through December 31 holiday shopping season, an increase of 5.8% over retail sales in the 2017 holiday period.
Brick-and-mortar store sales are forecast to rise by 4.4% to $878.38 billion, up by more than $15 billion from eMarketer’s prior forecast. E-commerce sales are forecast to rise by 16.6% to a total of $123.73 billion, more than 12% of all 2018 holiday sales. Nearly half of all e-commerce sales (43.8%) will be made by consumers using smartphones and tablets.
The Conference Board’s Consumer Confidence Survey reached an 18-year high last month of 137.9, largely on the strength of the U.S. job market. Jobs have outnumbered job seekers for the past two months, and consumers don’t see any weakening in the job market for several months.
Andrew Lipsman, principal analyst at eMarketer, said, “While ecommerce will continue to see strong double-digit gains, brick-and-mortar retail should be a particular bright spot this holiday season. … Retailers are luring in shoppers with remodeled stores, streamlined checkout and options to buy online, pick up in-store.”
Cindy Liu, eMarketer forecasting analyst, commented, “For retailers, it will be a battle for ecommerce market share. We should expect more promotions and perks like free and fast shipping, as retailers compete against Amazon.”
Amazon announced Monday that for a limited time beginning yesterday, all U.S. shipping would be free. That will be a tough act for competitors like Walmart and Target to meet or beat, but both have beefed up their buy online, pick up in store option and other shipping choices. That buy online and pick up in the store option has proven hugely popular with consumers, with usage more than doubling since last January.
Brick-and-mortar retailers also have reduced the importance of Black Friday to the success of their holiday sales plans. For the four-day Thanksgiving holiday weekend, analysts at Adobe Digital Insights have projected sales of $23.4 billion, nearly one-fifth of the total forecast for the entire season. Black Friday sales are forecast at $5.9 billion and Cyber Monday sales at $7.8 billion. The days of standing in a line and fighting with a mob are well and truly over.
While the global economy may be getting a little shakier, U.S. consumer confidence looks so strong that it’s harder and harder to expect anything short of a $1 trillion holiday shopping season this year.