US consumers could spend more than $1 trillion this holiday season, a market research firm estimates, which would mark the first time sales pass that threshold.
According to eMarketer, Americans likely will spend $1.002 trillion from Nov. 1 to Dec. 31. This would be a 5.8% increase from last year, and the strongest growth since 2011, eMarketer said. The research firm credits low unemployment, strong income growth, and high consumer confidence for the expected boost in spending.
What’s more, many of the economic headwinds from 2018 likely won’t have a significant impact until next year, meaning that holiday shopping will stay strong. While many consumer goods are affected by Donald Trump’s increased tariffs on Chinese imports, eMarketer predicts that retailers won’t pass on price increases until next year.
According to eMarketer, brick-and-mortar sales represent 87.7% of total holiday spending, a share that has declined. This year, e-commerce sales are estimated to increase 16.6% to $123.73 billion—12.3% of all holiday retail sales.
“For retailers, it will be a battle for e-commerce market share,” eMarketer forecasting analyst Cindy Liu said in a statement. “We should expect more promotions and perks like free and fast shipping, as retailers compete against Amazon.”
Retail giants are already stepping up deals to attract consumers. Target has already released its Black Friday ad for 2018, while Walmart and Best Buy are expected to do the same soon. Amazon has announced that all US customers— regardless of how much they spent or whether they are a Prime member—are eligible for free holiday-season shipping. These promotions will likely pave the way to eMarket’s $1-trillion mark.