United States / Industry Insights
E-Commerce Continues to Dominate Holiday Spending

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by Robert Miles, Senior Strategic Market Research Analyst
Dec 21 2018

2018 Holiday Spending at the Industry Level

The holiday season is often marked by festive parties, good food and gifts. However, this also means that we, as consumers, tend to spend more during the winter months compared with the rest of the year. This holiday season is no exception, with strong employment gains and broad economic growth in 2018 expected to push up spending. According to the National Retail Federation’s (NRF) holiday spending survey, holiday sales are forecast to grow between 4.3 and 4.8% this year. The NRF’s November consumer survey also highlights the top five gift categories for the season: clothing and accessories; gift cards; toys; books; and food and candy. However, despite another year of growth during the holiday season, not everything is rosy for retailers.

ecomm holiday

From an industry perspective, the NRFprojections point us to some of the key retail industries that are likely to benefit this season. These are in line with the largest sub-sectors outlined in the chart above. The retailer industries experiencing the full force of holiday spending this year include: Home Furnishing Stores (IBISWorld report 44229); Consumer Electronics (44311) and Computer (44312) Stores; Supermarkets and Grocery Stores (44511); Men’s (44811) and Women’s (44812) Clothing Stores; Hobby and Toy Stores (45112); and Department Stores (45211). While retail locations expect a boon to sales from the holiday rush, the specter of e-commerce still looms large. According to US Census data, Nonstore Retailers, which is a subsector dominated by e-commerce, has consistently gained a share a holiday purchases to the detriment of other industries over the last 20 years. This competitive factor is expected to restrict 2018 overall revenue growth for many of the industries that sell key holiday spending products.

holiday ind

However, procrastination is likely to act in support of brick and mortar retailers in the holiday season. NRF survey data suggests that 134.0 million consumers expect to still be shopping on “Super Saturday,” the final Saturday before Christmas. The need for quick gifts is likely to drive consumers to brick and mortar locations this season, fending off the pressures of e-commerce. Nonetheless, the continued advances in shipping and logistics associated with e-commerce sellers make it likely to lessen this procrastination effect in coming years. Another respite from e-commerce competition is the trend toward giving gifts of experience. The NRF survey data states that 39.0% of people want a gift of an experience and 23.0% plan to give a gift of experience. This is likely to support retail locations through gift card sales while also supporting industries in the Arts, Entertainment and Recreation sector (NAICS 71). 


Edited By: Taylor Feuss