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Tuesday, October 31, 2017

Holiday spending projections bode well for retailers

Two separate consumer surveys conducted by Deloitte and the National Retail Federation point to a robust 2017 holiday season ahead for U.S. retailers. The NRF projected total holiday retail sales in November and December could reach $682 billion, up 4 percent from last year, as consumers plan to spend an average $967.13 during the holidays. Deloitte projected holiday spending will average $1, 226 for both gift and non-gift items.

For the first time in survey history, both Deloitte and the NRF found that a majority of holiday shoppers plan to shop online, overtaking mass merchant and department stores. Fifty-five percent of those surveyed by Deloitte and 59 percent by NRF designated online as their preferred holiday shopping destination. Deloitte's survey revealed 51 percent of consumer holiday budgets were being allocated for online spending versus 42 percent for in-store.

According to Deloitte, 44 percent of survey respondents expect to shop at mass merchants and 28 percent at department stores this holiday season. NRF's figures were slightly above that with 57 percent planning to target department stores, 54 percent discount stores, 46 percent grocery stores/supermarkets and 35 percent clothing or accessory stores.

The NRF survey also revealed that 27 percent of holiday shoppers plan to visit an electronics store and 25 percent will frequent small and local businesses. Gift cards and clothing continue to dominate as consumer gift choices, garnering 49 percent apiece in Deloitte's annual survey, and 61 percent and 55 percent, respectively, in the NRF survey.

Digital influence

Progress in mobile payments continues as 22 percent of Deloitte survey respondents said they intend to use dedicated retail or payment apps to make holiday purchases in-store. Overall, 40 percent anticipated using a retailer's app on their smartphone and 36 percent intended to use mobile payment apps over the holiday season.

"Whether a retailer is online or store-based, their digital influence is one of the strongest cards to play this holiday season," said Rod Sides, Vice Chairman, Deloitte LLP and U.S. Retail, Wholesale and Distribution Leader. "Even though 80 percent of people said they expect the majority of their shopping will fall in late November onward, decisions about where they'll shop and what they buy will be largely determined by the digital interactions occurring now."

Deloitte estimated that retailers have a 75 percent probability of converting a desktop or laptop shopper to a purchaser, and a 59 percent probability of converting a smartphone shopper, which could bode well for retailers who create an experience that blends one-of-a-kind items, inspiration, uncomplicated navigation and frictionless transactions, Sides noted.

For more information about Deloitte's 2017 Annual Holiday Survey, visit www2.deloitte.com/us/en/pages/consumer-business/articles/holiday-retail-sales-consumer-survey.html?id=us:2el:3pr:hol17:eng:retail:102517 . For NRF holiday spending data, visit nrf.com/resources/consumer-research-and-data/holiday-spending/holiday-headquarters . end of article

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