Research from the NRF shows that 42% of consumers started shopping for the holidays earlier this year.

The National Retail Federation predicts that holiday sales between Nov. 1 and Dec. 31 will increase between 3.6% and 5.2% over the same period in 2019.

Online sales are predicted to increase between 20% and 30% to between $202.5 billion and $218.4 billion, up from $168.7 billion last year, according to the NRF.

“Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend,” said Jack Kleinhenz, NRF chief economist. “Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago.”

With e-commerce sales up 36.7 % during this year’s third quarter compared with 2019, many households are expected to depend on digital shopping to make many of their holiday purchases, just as they have for much of their everyday spending this year. The online spending includes websites operated by bricks-and-mortar retailers, which have become major players in the online market as retail channels have merged, according to the federation.

“There are definitely shifts within categories. We’ve seen a real strength in furniture, home furnishings, building and gardening, and we predict those will continue to grow due to the strength in the housing market which is pulling along retail sales in those categories,” said Kleinhenz.

The forecast comes as NRF’s latest research shows 42% of consumers started their holiday shopping earlier than usual this year. NRF’s New Holiday Traditions campaign urged consumers to shop early amidst the pandemic, and research revealed that 59 % had begun by early November.

As a result of store shutdowns and stay-at-home orders last spring, not all retailers and categories have rebounded as quickly, including small and mid-sized retailers. As calculated by the NRF, retail sales were up 10.6% this October vs. October 2019, likely driven in part by early holiday shopping. For the first 10 months of this year, retail sales were up 6.4% vs. the first 10 months of 2019.

The NRF forecast is based on an economic model that takes into consideration a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather.

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