What's the Holiday Sales Scenario?
The holiday retail season will play out in one of two ways—a relatively stable year-over-year sales increase of 0% to 1%, or a jump of 2.5% to 3.5%—both of which are lower than prior years, according to Deloitte.
Scenario one: Consumers experience growing anxiety about their health and finances. This reinforces the current high savings rate, which was 17.8% in July 2020 versus 7.4% in 2019. Consumers won't spend on holiday items as they budget for essential expenses.
Scenario two: Consumers experience growing confidence with a federal pandemic relief bill, unemployment insurance benefit supplement, and effective vaccine. Because they dramatically cut spending on travel and experiences, they may redirect funds to holiday spending, Deloitte says.
The gift that keeps on giving: E-commerce sales will grow by 25% to 35% year over year during the 2020-2021 holiday season compared to 14.7% during the same period in 2019. E-commerce holiday sales are expected to generate between $182 billion and $196 billion this season.