Executive Briefings

Modest Increase in Holiday Sales Predicted, But Niche Companies Eat Into Major Retailers' Share

Retailers should see a modest uptick in holiday sales this year. But the news isn't all positive for big chains or even major online retailers.

Modest Increase in Holiday Sales Predicted, But Niche Companies Eat Into Major Retailers' Share

Total holiday sales will exceed $1tr this holiday (November through January), representing a 3.6 percent to 4 percent rise over last year, according to Deloitte's annual retail holiday sales forecast. E-commerce sales are forecast to increase 17 percent to 19 percent, reaching $96bn to $98bn during the 2016 holiday season. But big retailers - both physical and online - are likely to face increased competition for a share of those sales as smaller- to mid-sized niche companies continue to take market share.

"We anticipate that marketplace fragmentation – more than e-commerce – will be the major disruptor this holiday season," said Ron Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader. "Retail competition will not only come from the big box down the street or major e-commerce players. It is also likely to come from the small- and mid-sized retailers that focus on niche products and experiences. This group has been collectively taking share from large, traditional retailers to the tune of $200bn in annual sales over the last five years."

Sides added that retailers who compete on differentiated products and experiences should be well positioned to outperform other competitors during the holiday season.

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Total holiday sales will exceed $1tr this holiday (November through January), representing a 3.6 percent to 4 percent rise over last year, according to Deloitte's annual retail holiday sales forecast. E-commerce sales are forecast to increase 17 percent to 19 percent, reaching $96bn to $98bn during the 2016 holiday season. But big retailers - both physical and online - are likely to face increased competition for a share of those sales as smaller- to mid-sized niche companies continue to take market share.

"We anticipate that marketplace fragmentation – more than e-commerce – will be the major disruptor this holiday season," said Ron Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader. "Retail competition will not only come from the big box down the street or major e-commerce players. It is also likely to come from the small- and mid-sized retailers that focus on niche products and experiences. This group has been collectively taking share from large, traditional retailers to the tune of $200bn in annual sales over the last five years."

Sides added that retailers who compete on differentiated products and experiences should be well positioned to outperform other competitors during the holiday season.

Read Full Article

Modest Increase in Holiday Sales Predicted, But Niche Companies Eat Into Major Retailers' Share