The National Retail Federation (NRF) is predicting that the 2021 holiday season will end up between 8.5% -10.5% higher than 2020 results. Its forecast (which excludes automobile sales, gas stations, and restaurants) is the highest increase in 19 years of US Census Bureau tracking.
Why all the excitement? “There is considerable momentum heading into the holiday shopping season,” NRF President and CEO Matthew Shay said in a statement. “Consumers are in a very favorable position going into the last few months of the year, as income is rising and household balance sheets have never been stronger. Retailers are making significant investments in their supply chains and spending heavily to ensure they have products on their shelves to meet this time of exceptional consumer demand.”
The NRF reports that consumers report they plan to spend an average of $997.73 in 2021, which is just under the pre-pandemic high of $1,047.83 reported in 2019. According to NRF Chief Economist Jack Kleinhenz, “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.”
All this growth will include continued strength in ecommerce, which is expected to stay strong even as in-store shopping rebounds. In 2019, online’s share of holiday shopping was 59%, according to Deloitte’s annual report. Online jumped to 64% in 2020 as people stayed in, but it is expected to remain high — at 62% according to Deloitte, or at 11% to 15% growth according to NRF — for 2021. This means all retailers need to be prepared to work across all channels, meeting customers wherever they prefer to shop.
When NRF polled 7,900 consumers in October in their NRF/Prosper winter holidays spending survey, 57% reported they planned to buy holiday items online this year, compared to 60% in 2020. But NRF reporting remains at the low end for industry forecasts of online retail performance.
And what about Black Friday? Well, that may be fading away. Many retailers report starting Black Friday sales as early as the beginning of November, and retailers of goods caught in the supply chain crunch are reporting that sale prices simply won’t be as sharp as they’ve been in the past.
This looks like a lot of good news for holiday sales! Make sure you have your inventories in order and your staff trained . . . it looks like we’ll all be busy in the months to come!