Judging by the early holiday season sales predictions trickling in, perhaps the one-two punch of uncertainty stemming from the presidential election and COVID-19 pandemic won’t ruin the crucial shopping period for most retailers.
Adobe Analytics predicted Wednesday that U.S. online holiday sales will tally $189 billion, up a strong 33% year-over-year. If that mark is hit, Adobe says it will “shatter” all previous records and be equal to two years of growth in one season. The robust online gains reflect people choosing to sidestep crowds during the pandemic and retailers ramping up the ease of obtaining online orders (same-day delivery; buy online, pick up in parking lot, etc.).
And if bumbling lawmakers could get off their soapboxes for a bit and pass a new round of stimulus, the online sales gains could be even better. Adobe —which assessed 1 trillion visits to 80 of the country’s largest retail sits to make its forecasts — estimates fresh stimulus would bump up U.S. holiday online sales by $11 billion. That would push total online holiday sales beyond $200 billion, up a cool 47% from a year ago.
Despite the economic uncertainty and unknown that is the pandemic, Walmart CEO Doug McMillon thinks it will be a good holiday season for retail.
“I think people want to celebrate the holiday. Hopefully families will take steps to do that in a safe manner. But we all need some love and joy, and this time of year brings those things top of mind. We’ll find a way to celebrate it and it will be a good year. It will be unique, but a good year,” McMillon said at the Yahoo Finance All Markets Summit.
The strategists at Wells Fargo appear to be on board with McMillon’s assessment, too.
Senior economist Tim Quinlan projects holiday sales will increase a solid 9%, which would make it the largest gain on record.
“That is not to say that things are fine for all retailers, (they are not), nor is it to say that consumers are in excellent financial shape (they are not, particularly not toward the lower end of the income spectrum). However, a forced thrift that has curtailed spending in the service sector and canceled travel plans frees up income for more spending on gifts. After the anxiety and stress of a year defined by the virus, natural disasters and a divisive election, we suspect holiday sales will also benefit from a yearning for comfort and normalcy, which many consumers may associate with having a few more gifts under the tree,” Quinlan said of his bold call.
There is momentum in retail right now ahead of the holidays believe it or not.
Target CEO Brian Cornell told Yahoo Finance last week that sales on the company’s two-day online deal event — held on Amazon Prime Day — were 2.5 times more than a year ago. Meanwhile, Hasbro CEO Brian Goldner called out strong sales of games and toys so far this month in an interview on Yahoo Finance’s The First Trade.
Said Goldner, “In October, we have seen high-teens [percentage] point-of-sale growth for both toys and games. We believe we'll have a good holiday season. We also believe we can grow versus last year's pro-forma numbers, with the combination of eOne Entertainment and Hasbro.”
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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