eMarketer Forecasts Moderately Strong Holiday Season

Retail sales to grow 3.8% during 2017 overall

August 18, 2017

US retail ecommerce sales are expected to jump 16.6% during the 2017 holiday season, driven by increases in mobile commerce and the intensifying online battle between large retailers and digital marketplaces.

At the same time, total retail sales will grow a moderate 3.1%, as retailers continue to experience heavy discounting during the core holiday shopping months of November and December, according to eMarketer’s latest report, “US Holiday Shopping 2017: Shoppers Continue Online Migration for This Year's Season.” (Subscribers to eMarketer PRO can access the report here. Nonsubscribers can purchase the report here.)

The gap between holiday season ecommerce sales growth and total retail sales growth continues to widen. eMarketer estimates that in 2017, holiday sales will total $923.15 billion, representing 18.4% of US retail sales for the year, a 0.1 percentage point drop from 2016.

eMarketer expects retail sales to grow 3.8% during 2017 overall, up from 2.9% in 2016. Unemployment remains low at 4.4%, and economic confidence is high, according to the Conference Board Consumer Confidence Index, with a level of 121 in July 2017. By contrast, the Confidence Index stood at 97 in July 2016, before edging up to 109 in November 2016 and 114 in December 2016.

Although retail in general will have a slightly slower year compared with 2016, ecommerce sales growth is expected to accelerate for this year’s holiday season, reaching 16.6%, compared with 14.3% in 2016. This rapid growth, along with the moderate growth in total retail, will push up ecommerce’s share of total holiday season sales to 11.5%. Additionally, November and December will account for 23.6% of full-year ecommerce sales.

On a quarterly basis, ecommerce growth is expected to pick up as the year progresses, with the highest growth of 16.4% in Q4, eMarketer estimates. Even so, the second half of this year is filled with uncertainty, and there have been some indications of consumer caution in June and July. “There was a bit of a drop in online sales around the 26th and 27th of May,” said Udayan Bose, founder and CEO of NetElixir, referring to a panel of 60 to 65 large and medium-sized retailers that use the search marketing agency’s data insights platform, LXRInsights. “We are approaching the holiday forecast with a little bit of caution.”

For the year, eMarketer expects to see 15.8% growth in retail ecommerce sales, with increases across all product areas. Ecommerce will account for 9.0% of total retail sales in 2017.

Photo by Heidi Sandstrom on Unsplash