With the end of each year comes the holiday retail season, a time when some retailers can see over thirty percent of their annual revenue arrive. Holiday sales are a sign of economic direction and consumer sentiment for both the year that was and the year that’s arriving. So what type of retail sales activity can we expect to see this holiday season?

The National Retail Federation, Mintel, and PwC are all out with their forecasts. PwC was the most bullish reporting that shoppers will spend 10 percent more this holiday. The NRF expects sales to rise 3.6 percent which is higher than the 10-year 2.5 percent average. Mintel was the most conservative citing a 1.3 percent growth forecast over last year.

That’s quite a range coming from three reputable sources. Who do we believe and what will make the difference this year?

WHAT WE KNOW

It’s always hard to correctly predict holiday spending, but sales should be up over last year, so that’s great. More specifically, here’s what we know…

We know that retailers will be ultra aggressive with their discounts. This has been growing over the last few years. (For example, Christmas cards kickoff the season and Tinyprints is already offering 40 percent off and free shipping.)

We know that the economy has remained strong throughout 2016 and that current consumer spending shows no signs of letting up.

We know that overall gift spending intentions remain similar to last year and that the average holiday shopper will buy 14 gifts this season.

We don’t believe that our November presidential elections will affect holiday spending, regardless of who wins. (We’ve written about this twice, once in August, again in October.)

We know that we don’t truly ever know what consumers will end up doing despite what they say, but Deloitte has put together the most well-rounded and directional view of consumer intentions this holiday that we’ve seen.

Our conclusion from all of this is that we have strong headwinds and we don’t have any dramatic differences from what we saw heading into the 2015 holiday season.

STRENGTH IN E-COMMERCE

Watch for huge online retail numbers this year. eMarketer is forecasting that online sales will rise 17 percent this season, five times faster than in-store. Furthermore, online sales will hit a major milestone this season generating 10 percent of all spending for the first time in history. Watch for Seattle-based Amazon to have a killer holiday season.

And yet with all of this online activity, 90 percent of all spending will still happen at the store level.

That brings in a wild card.

THE WILD CARD

Economists can theorize, consultants can pontificate, experts can weigh-in, and strategists can strategize all day long, but in the end, basic human inconveniences come to play and final sales fluctuations could be most dramatically affected by an often overlooked thing: the weather.

Really? Yes, extremely cold weather can affect shipping and inventory while unseasonably warm weather can decrease overall traffic. As unscientific as it sounds, when the economy is stable like it is this season, and once scale is applied across the entire U.S., the weather can become the large wild card.

Predicting holiday weather is largely a fool’s errand. But IBM’s Weather Company is showing that a weak La Nina could bring colder temperatures in the east and warmer conditions across the west and south. (The northwest is predicted to be average.) Colder temps are expected back east early in the season while warmer temps in the west and south are predicted later in the season. All-in that combo, which will affect some of the country’s largest markets, could take away a few sales but, overall, that’s a fairly promising forecast.

FOUR PERCENT GROWTH?

It feels like the NRF might be closest. Last season’s holiday retail sales were up 3 percent over 2014 to $626B which was nearly a full point down from the 3.7 percent prediction they cited at the onset. So the NRF probably studied extra hard this year to get to their current +3.6 percent sales forecast.

But we’re feeling bullish for even larger surprises across online sales this year. And a lack of predicted dramatic weather could play out in retailers’ favor for additional foot traffic. Add in those aggressive discounts and early shoppers across the nation and let’s add some extra holiday cheer to the prediction to see holiday sales ring in at +4 percent over last season.

Sources:

Deloitte 2016 Holiday Survey

National Retail Federation Holiday Sales Forecast

PwC 2016 Holiday Outlook

Mintel Winter Retail Sales

Winter Weather Outlook

Fortune: Retailers’ Best Holiday Season