AlixPartners to retailers: This double-digit-increase holiday season is ‘yours to lose’

The firm forecasts US sales will increase 10-13% this season, and releases a consumer survey showing that 88% plan to spend the same or more this year, while only 12% say they plan to spend less—the same amount who say the delta variant of COVID-19 will decrease their spending

NEW YORK (September 20, 2021) - AlixPartners, the global consulting firm, today released its forecast for retail holiday sales in the United States: an increase of 10% to 13% over last year’s holiday season, which would makes this the strongest holiday period since 1999. The firm today also released a survey conducted this month of more than 1,000 American consumers which reinforces its sanguine forecast, including the finding that a whopping 88% of consumers plan to spend the same or more this holiday season, while only 12% plan to spend less. Notably, it seems that even the recent rise of the delta variant of COVID-19 isn’t slowing down consumers this season, as only 12% said it is decreasing or likely to decrease their holiday spending.

“Our message to retailers is: ‘This holiday season is yours to lose,’ said Joel Bines, global co-leader of the retail practice at AlixPartners and a managing director at the firm. “There’s unprecedented pent-up demand out there, consumers have lots of money in their pockets, in part due to recent government programs, and even the rise of the delta variant, while certainly concerning, doesn’t seem poised to put a damper on things, thanks in part to the big increases in online shopping this past year. That doesn’t mean, however, that retailers won’t face some big challenges this season, foremost among them being ironing out some very thorny supply-chain disruptions, dealing with increased logistics and delivery costs, dealing with currently high inflation rates, and dealing with increasing labor costs. If not handled correctly, any one of those things could quickly derail things for retailers this season.”

“One big thing retailers should focus on right now is ensuring they truly have robust omnichannel-fulfillment capabilities,” said David Bassuk, also global co-leader of the retail practice at AlixPartners and a managing director at the firm. “That means things like things like optimizing inventory across stores and distribution centers, using stores for online fulfillment as mini-distribution centers, and fully leveraging concepts like BOPIS [buy-online-pick-up-in-store] and curbside pickup. And, of course, all those things need to be underpinned by integrated—and well-informed—analytics.”

The 88% of consumers in the AlixPartners survey who said they plan to spend the same or more this year than last represents an increase of an also-hefty 12 percentage points from the amount who said that in AlixPartners’ annual survey of a year ago, while the 12% who said they plan to spend less compares to 24% who said that last year.

Additionally, this year’s survey also found that 53% of consumers plan to start their holiday shopping before Halloween (October 31), an increase of 4 percentage points versus last year’s survey. This year’s survey also found that 43% of consumers plan to do the majority of their holiday shopping online. On the other hand, though, 57% of consumers said they plan to visit physical stores this season—an increase of 7 percentage points versus last year’s survey—which is perhaps another indication of power of pent-up demand now.

“Consumers will be showing up to shop this holiday, but the power has shifted away from retailers to consumers,” said Alexa Driansky, a senior vice president in the retail practice at AlixPartners and one of the contributors to this year’s forecast and survey. “With a quick internet search, consumers will switch to whichever retailer has the product in stock, find a good price and get either delivery or pick-up fast and for free. Retailers will need to be more agile and resourceful than ever to make sure it’s them and not their competition that comes out as the winners this season.”

The 2021 AlixPartners US Retail Holiday-Sales Forecast is based on proprietary AlixPartners methodology and was first instituted in 2012. The period it encompasses is October 1 through December 31 for each year cited. All its numbers are seasonally adjusted, and it covers core retail sales, which exclude motor vehicles, fuel, and restaurants and drinking establishments.

The 2021 AlixPartners US Retail Holiday-Outlook Survey polled 1,010 US consumers ages 18 and older September 3-10, 2021.

About AlixPartners

AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York, and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.