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Deloitte Forecasts A Merry Christmas For Retailers

Consumers’ income gains — and their propensity to spend it — should make for a jolly holiday season for merchants.

According to Deloitte, the financial services firm, consumer spending will likely lead to a healthy 4 to 4.5 percent increase in retail sales between November and January, for a total haul of more than $1 trillion.

Adding fuel to the holiday fires will be digital sales, which are forecast to rise upward of 21 percent, to as much as $114 billion for the season.

However, possible headwinds from the North Pole could dampen shopping sprees, Deloitte cautioned, including an increased savings rate, another government debt crisis, or an extended hurricane season.

The good news, said Deloitte vice chairman and U.S. retail and distribution sector leader Rod Sides, is that “retail is thriving, and it is the proliferation of new, niche retailers that is resulting in share constantly changing hands.”

“Consumers have unlimited alternatives and often bounce between brands, touchpoints and influencers, making it more difficult for retailers to attract shoppers without some level of customization,” he noted. “These disruptive factors are likely to combine to create a highly competitive and promotional holiday season.”

Deloitte’s advice? “Retailers should modify their assumptions about what drives traffic, engagement and holiday sales growth, and realign around customer experience, creating relevant, emotional and inspirational connections that go beyond just product, price and assortment,” Sides said.