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Deloitte Predicts Holiday E-commerce to Grow 25-35%

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Deloitte has released its annual holiday retail forecast that shows e-commerce sales growing by 25-35%, as well as holiday retail sales increasing between 1% and 1.5%. Notably, the positive and negative drivers for the season will be characterized by what is being characterized by Deloitte and others as the "K-shaped recovery," defined as "one in which the performance of different parts of the economy diverges like the arms of the letter 'K.'" The haves will fuel growth, the have-nots will suppress sales.

Previously: Instagram Expands Shopping To IGTV

Deloitte’s retail and distribution team projects that holiday spending will result in sales between $1,147 billion and $1,152 billion November through January.

According to Deloitte, e-commerce holiday sales are expected to generate between $182 billion and $196 billion this season. In 2019, sales increased by 14.7%.

Its retail and distribution team said that one of two possible scenarios can be seen this holiday season: a relatively stable year-over-year sales increase (0% to 1%) or a more significant jump (2.5% to 3.5%).

The formal forecast increase (between 1% and 1.5%) is a result of melding both scenarios, Deloitte says.

Continuing worries about health and finances would act as a suppressant on holiday spending, which would fuel a gain of 0% to 1%. For year-over-sales to increase 2.5%-3.5%, Deloitte notes, "consumers will experience steadily increasing confidence ... In addition, as consumers have dramatically cut costs related to travel and experiences, these funds might be redirected to spending on holiday gifts."

“The lower projected holiday growth this season is not surprising given the state of the economy," says 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 holiday sales somewhat. E-commerce is likely to be a big winner because consumers have shown a clear movement towards buying online rather than at brick and mortar stores.”