Online sales this holiday season are forecasted to increase 15.5% over 2017, reaching nearly $120 billion, and are expected to represent 16.7% of all holiday retail spending, according to Internet Retailer Research estimates released Friday.
Total retail sales (excluding items not typically bought online, such as fuel and automobiles) are projected to rise 5.5 percent over last year, to $719 billion, according to Internet Retailer, which analyzes retail sales metrics and consumer spending habits. Although a bit more optimistic, Internet Retailer’s total retail sales estimates are roughly in line with projections released last week by AlixPartners, which anticipates sales for the November through January period will rise between 3.1% to 4.1% over comp sales from 2017.
During the holiday retail spending season in November and December 2017, online sales accounted for just over 15 percent of the $681.6 billion spent, according to Internet Retailer.
“The growth in U.S. e-commerce has been consistent since 2010, averaging 15 percent each year and showing no signs of slowing down,” said Fareeha Ali, director of research strategy at Internet Retailer, in a statement. “Add to that high consumer confidence, a healthy economy and strong 2018 online growth from retail giants like Amazon and Walmart, and we’re on track for a big holiday shopping season.”
This year’s expected record-high holiday sales can be attributed in large part to U.S. consumer confidence being at its highest level in 18 years, according to Internet Retailer citing the Conference Board’s Consumer Confidence Index, which in August was 11 percent above consumers’ economic sentiment in August 2017, marking its highest point since October 2000.
According to RetailMeNot’s 2018 Holiday Insights Guide released last week, Americans intend to spend $803 on average between Black Friday and Cyber Monday this year, up from $743 spent on average in 2017.
Additionally, U.S. consumers have reported a steady yearly increase in online gift buying, and that is expected to continue this year. According to a March 2018 Internet Retailer and Bizrate Insights survey, about three-quarters of U.S. shoppers said they purchased at least 25 percent of their gifts online during the 2017 holiday shopping season, representing a three percentage point increase from the prior year.
Growth in online sales is not limited to the traditional holiday season, according to Internet Retailer’s Ali, who said other holidays are also experiencing significant yearly increases.
“Our research shows that more shoppers are turning to the web to purchase gifts during peak seasons,” Ali said. “For instance, we estimate 24 percent of all Valentine’s Day purchases this year were online — far more than the overall 13 percent e-commerce penetration in 2017.”