The North Pole must be buzzing.
Forecasts are calling for a meteoric rise in holiday spending this year, fueled by Americans, who are arguably more well off than they have been in five years.
ComScore’s official forecast says to expect e-commerce spending to hit $61 billion in November and December, representing a 16 percent jump over the same period last year. Mobile purchases are predicted to account for $7.9 billion of that, growing 25 percent year over year.
“The stock market is near all-time highs, and inflation has been kept in check,” said Gian Fulgoni, Executive Chairman Emeritus of comScore. “The recent trends we’ve seen in online consumer spending suggest that American consumers are ready to open their wallets and embrace the spirit of giving this holiday season.”
That sets the bar pretty high, but then again, Amazon has been working hard for weeks already, trying to squeeze every last cent they can out of the holiday cheer. Back in October, the Seattle retailer announced it was rolling out so-called “Black Friday” deals a full 28 days before shoppers normally line up for for a chance to get low prices on Christmas presents.
But its foolish to think it’s only a race among Amazon, eBay and other Internet players.
In fact, brick-and-mortar retailers seem better prepared this year than ever before, particularly when it comes to offering a seamless shopping experience across both online and physical stores.
Take, for example, the ability to order online and pick up in the store. Major retailers, like Macy’s and Walmart, offer the service and Target is promising that online orders can be picked up in the store within an hour of placing them 80 percent of the time. Additionally, Target is taking other extreme measures, by offering free shipping on all online orders — no minimum purchases required.
Amazon can’t even beat those prices, unless you subscribe to Prime which costs $99 a year.
It seems Target was willing to eat into Amazon’s sales at any cost.
Yesterday, the Minneapolis-based retailer said free shipping has led to a “meaningful increase in both orders and conversion.” The offer “is not accretive” to profit as any increased sales don’t offset the rise in shipping expenses, said Kathee Tesija, Target’s merchandising and supply chain chief, according to MarketWatch.
There’s other signs that online spending will be up — or at least people are preparing for them to be.
FedEx’s outlook calls for deliveries between Thanksgiving and Christmas Eve to rise 8.8 percent to 290 million. Large numbers of seasonal workers have also been added to handle the demand. Amazon is adding 80,000 workers for the holiday rush and UPS is hiring up to 95,000 seasonal employees.
Oddly, it is Amazon that is being more cautious about how big the holiday surge will be in 2014.
Last month, it projected that fourth-quarter sales would total between $27.3 billion and $30.3 billion, lagging behind the $30.89 billion analysts had expected, on average. The Seattle retailer’s stock tanked because of that forecast.
But if you are looking for another way to put these numbers into perspective, here’s what Scrooge would say: It’s all peanuts compared to what we recently witnessed in China earlier this month. On a holiday known as Singles Day, Alibaba all on its own recorded $9.3 billion in sales, which is more than the U.S. will do on Black Friday or Cyber Monday combined.