The National Retail Federation (NRF) predicts online holiday sales will see strong growth in 2020 over last year, and among the many factors it considered in its estimates was consumer psychology.
“NRF expects that online and other non-store sales, which are included in the total, will increase between 20 percent and 30 percent to between $202.5 billion and $218.4 billion, up from $168.7 billion last year,” it revealed Monday morning.
NRF Chief Economist Jack Kleinhenz said there was uncertainty about consumers’ willingness to spend given the pandemic and a difficult year, but they will likely spend more than anyone would have expected just a few months ago, he said.
“After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday,” Kleinhenz said. “There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season.”
Total holiday sales (online and offline) look to be strong this year, but the NRF gave a wide range in the following statement:
“With retail sales rebounding strongly due to continued consumer resilience, the National Retail Federation today forecast that holiday sales during November and December will increase between 3.6 percent and 5.2 percent over 2019 to a total between $755.3 billion and $766.7 billion. The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a 4 percent increase to $729.1 billion last year and an average holiday sales increase of 3.5 percent over the past five years.”
Interestingly NRF research found 42% of consumers started their holiday shopping earlier than usual this year. It included information about the criteria behind today’s forecast:
“The NRF forecast is based on an economic model that takes into consideration a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather. NRF defines the holiday season as November 1 through December 31. Numbers forecast by NRF may differ from other organizations that define the holiday season as a longer period or include retail sectors not included by NRF, such as automobile dealers, gasoline stations and restaurants.”
You can read the entire release on the NRF website.