2021 Holiday Predictions: Ecommerce, Availability, Record Spending Will Drive Season
Abby Long is the Senior Managing Editor at PMG.
With Halloween candy marked down in stores, and holiday music spreading cheer, this week’s briefing features a round-up of the latest holiday shopping predictions, retail sales figures, and more.
Holiday retail sales are expected to break records this year, with firms including Adobe, eMarketer, and Salesforce predicting offline and online sales to increase anywhere from seven to ten percent above 2020 figures.
Ecommerce is predicted to account for roughly 20 percent of total retail sales in the U.S.
Adobe reports out-of-stock messaging has risen 172 percent year-over-year heading into November and December, a byproduct of supply chain constraints and surging consumer demand.
The National Retail Federation (NRF) holiday forecast predicts 2021 holiday retail sales will increase 8.5 to 10.5 percent to total roughly $843 billion to $859 billion in November and December, compared to $777.3 billion last year. The estimate for retail sales in November and December was the largest ever rise predicted by the retail trade group.
According to the NRF, “Last year saw extraordinary growth in digital channels as consumers turned to online shopping to meet their holiday needs during the pandemic. While ecommerce will remain important, households are expected to shift back to in-store shopping and a more traditional holiday shopping experience.”
“The outlook for the holiday season looks very bright. The unusual and beneficial position we find ourselves in is that households have increased spending vigorously throughout most of 2021 and remain with plenty of holiday purchasing power,” said NRF Chief Economist Jack Kleinhenz.
The Adobe online shopping forecast for the 2021 holiday season (November 1 to December 31) found that U.S. holiday online sales will reach $207 billion, a new record representing a ten percent year-over-year increase. Keeping in mind the current volatility due to macroeconomic factors and the pandemic, Adobe highlighted that year-over-year growth could fluctuate anywhere between five percent, representing $198 billion, and 15 percent, representing $216 billion.
According to the forecast, “In the U.S., as ecommerce becomes more ubiquitous, the major shopping days are losing prominence. Cyber Week (Thanksgiving through Cyber Monday) is expected to drive $36 billion in online spending — 17 percent of the entire holiday season. The growth is slowing, however, coming in at just five percent year-over-year for the five-day period (less than the season overall at ten percent year-over-year).”
“Adobe expects Cyber Monday to drive $11.3 billion (rising four percent year-over-year) and [will] remain the biggest day of the season (and year), with Black Friday coming in at $9.5 billion (a five percent year-over-year increase) and Thanksgiving at $5.4 billion (growing six percent year-over-year ). All three major shopping days are growing less than the season overall.”
eMarketer forecasts total U.S. retail sales will top $1.1 trillion this year, a nine percent year-over-year increase, with brick and mortar sales hitting $935.79 billion (7.9 percent year-over-year growth), as ecommerce reaches $211.66 billion (a 14.4 percent year-over-year increase).
“The 2021 holiday season will be one of the most dynamic on record, driven by the crosscurrents of heavy consumer demand, a shaky supply chain, and rapidly shifting shopping patterns.”
— eMarketer, 2021
Cyber Monday is likely to be the biggest online spending day — once again — with eMarketer estimating online sales will hit $12.12 billion, rising 12.4 percent over 2020 figures. Black Friday will follow as the second-biggest shopping day of the season, driving $10.42 billion in sales (15.8 percent year-over-year increase), with Thanksgiving coming in third “with a 20.7 percent jump to $6.10 billion in sales.”
Ecommerce is expected to account for 18.4 percent of total retail sales in November and December, growing 14.4 percent year-over-year, with leading retailers like Amazon, Best Buy, Target, and Walmart capturing the majority of online sales.
Salesforce expects global digital sales to top $1 trillion this holiday season.
Mastercard SpendingPulse predicts U.S. holiday sales will increase 7.4 percent year-over-year.
The Forrester Holiday 2021 Retail Report found one-quarter of U.S. online consumers surveyed will spend more this holiday season than last year.
The Wall Street Journal reports that many economists “see consumer spending — both in goods and services— rising at a seasonally adjusted annual rate of three percent in the fourth quarter from the third.”
By all accounts, consumer spending is expected to reach an all-time high this holiday season as people settle into new routines, return to in-store shopping, and plan to reconnect with friends and family for in-person holiday celebrations.
“For brands, this combination of the state of the market and consumer intent represents a tremendous opportunity,” said Tim Larder, client strategy partner at PMG.
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Already, many brands, including Apple, Target, Nordstrom, and Lowe’s, have kicked off their holiday sales in earnest, helping to capture early-bird shoppers and alleviate pressures — from limited inventory in stores due to supply chain constraints to potential delivery delays for ecommerce shoppers — anticipated around peak shopping days.
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