Dive Brief:
- The main trade group for shopping centers has added its holiday forecasts to the pool, projecting a 1.9% rise in spending to $862.2 billion.
- The average adult plans to spend $655 on holiday items, higher than 2019's spending, and 73% expect to spend the same or more this season, according to the annual survey from the International Council of Shopping Centers.
- ICSC also estimates that e-commerce sales will jump 25% this year. Additionally, the survey found 53% of consumers plan to use services like curbside pickup and click-and-collect.
Dive Insight:
Always challenging, forecasting the future is supremely difficult in 2020, given numerous factors that can change the course of the economy in short order. Will COVID-19 surge, and to what extent? Will more stimulus make it out of Congress? How do households feel about their financial prospects in 2021 and beyond? There are no sure or stable answers to these questions. With some, the possibilities diverge in opposite directions.
Deloitte, in releasing its annual holiday forecasts, acknowledged this by describing a "K-shaped" recovery. That entails two scenarios, one where things go relatively well in the economy and perhaps progress is made on a COVID-19 vaccine and/or stimulus, and sales tick moderately up as consumers feel more optimistic. In the other, sales remain flat as the economy limps along into 2021.
Nearly all estimates so far agree on one thing: robust e-commerce growth. "We expect to see an increase in online shopping activity which means that those retailers that have implemented an aggressive omnichannel strategy will likely do well during the holiday season," ICSC CEO Tom McGee said in a statement.
The growth estimates track with a year that has already brought an accelerated expansion in e-commerce to much of the retail world. It's a testament to consumers' continued wariness around in-store shopping, with the pandemic still working its way through the U.S.
Along with shifting channels, consumers are mindful of the precautions stores take when they do go shopping in physical locations. According to ICSC, 66% of surveyed consumers said they are more likely to visit stores with strict health precautions in place, like mask requirements, occupancy limits, contact barriers and one-way aisles. Others have noted similar concerns in the population. PwC recently reported that 65% of surveyed consumers said they were concerned about catching COVID-19.
ICSC, as others have found, reports that consumers plan to start their holiday shopping earlier. A full 77% said they planned to shop earlier than they usually would, with 67% saying they would start before Thanksgiving and 23% saying they would start as early as October.
And retailers are ready for them, led by Amazon, which is holding Prime Day this week. Walmart, Target and others are joining the fray with their own online Black Friday-esque discounting.
