Retailers shift their ad spending from TV, radio and print ads to digital ads.
The National Retail Federation forecasts a 9% to 12% jump in online sales and a 4.1% increase in total retail sales—both slightly ahead of 2013 growth.
Retail sales will grow 4.1% this year—a slightly faster pace than last year, as online and store customers are likely to feel more confident as economic conditions improve, the National Retail Federation predicted today in its annual economic forecast.
Online sales, which are factored into total retail sales, should grow anywhere from 9% to 12%, the trade group predicts. The retail sales forecast does not include sales from the auto sector, gasoline or restaurants.
“We’re optimistic that 2014 will be better than 2013, primarily because there is going to be less volatility,” NRF president and CEO Matthew Shay said today in a conference call with reporters. “There was a significant impact from the government shutdown in October and we know that that played a role in the consumer psyche. Consumers and investors didn’t feel as confident extending themselves. We think that’s behind us now.”
While economic conditions may be an upward swing, some retailers are still looking back at this past holiday season to understand what worked and what didn’t, Shay added. “This holiday season we saw a real dramatic increase in the way consumers embraced mobile technology and the way in which they were extremely confident in waiting for the last minute to make that purchase.”
The trade group acknowledged that stores suffered from poor weather conditions and other factors during the holidays, which drove heavy discounting and promotional activity.
When asked by a reporter if 2014 would see a reduction in overall store count from retail chains, Shay declined to comment directly, but said that retail chains would likely continue to reallocate resources in response to changing consumer behavior. “As consumers shop in new and different ways and rely more heavily on mobile and online, there will have to be implications for stores and how retailers allocate spending on real estate,” he said.