This article was originally published on reverb, Drake Cooper’s reflections on advertising, creativity, and trends. Read more.

Holiday Retail Sales Forecast

When John Lewis releases their annual holiday ad upon the web, the season officially begins. The UK retailer spends all year working with DDB to craft the seasonal piece… And while it’s tough to follow the emotion of last year’s ad, this one is also very well done.

So how are holiday retail sales predictions shaping up in the US this year? After all, retailers can attribute between 25 – 40% of their annual sales during this time so it’s important to watch.

First, the NRF estimates that holiday retail sales will increase 4.1% this season to $586 billion. This percentage increase isn’t as high as the last two years (which followed several dismal seasons) but it remains higher than the 10-year average holiday sales growth rate of +3.5%.

Shoppers spend, on average, $740 per season on holiday merchandise. This season Deloitte’s annual survey of 5,000 consumers states that 63% of shoppers intend to “spend the same or more” then they did last year. To find another year with so many reporting to spend “the same or more” you have to go back to Deloitte’s 2006 survey.

But even though consumers are reporting to spend more the amount of gifts they are buying continues to decline, from 23 in 2007 to 15 last season. Of those gifts most consist of clothing (51%) and gift certificates (47%).

As expected, the use of the web continues to escalate with a full one-quarter of shoppers reporting that the “majority” of their purchases will be online.

Showrooming will be more challenging for brick-and-mortar retailers this year, but there are some strategies that can be done in defense.  This mobile movement is also why many top retailers—from Target to Best Buy—will match the prices found on Amazon.com this year. Consumers must ask for the price cuts at check out and show proof. They also have to shop early as many stores will stop online price matching the week prior to Christmas.

An interesting trend is that toy sales are actually down 30%–from $85 per person to $60 per person since 1998. Videos games are thought to be the primary culprit.

Another trend to watch socially is Pinterest. Unlike Facebook and Twitter, Pinterest is a place where it’s actually okay to buys things. Wayfair’s Jane Carpenter recently summed up the situation well:

“Our Pinterest referrals spend 70% more than nonsocial channels, including search. They are 10% more likely to purchase when compared to other social channels.” 

To see how all of these holiday retail predictions begin to tabulate, all eyes will be on Black Friday…

Of course, many might think it’s too early for a Holiday post… But 51% of us have already started our shopping.

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