Tipping Point: Online Holiday Sales are Expected to Surpass In-store Sales in 2017

In a year that has already seen its share of firsts, here’s another one—or at least the prediction of another one. Consumers say they plan to spend more money online than in physical stores during the coming holiday shopping season, putting an exclamation point on trends in the retail sector over the past few years. That is according to a 5,000-person survey released recently by Deloitte.

The consulting firm found consumers expect to spend 51% of their budgets online compared with 42% in physical stores. This is the first time respondents have indicated such a reversal of traditional shopping patterns. Last year they told Deloitte they planned to spend equal amounts shopping virtually and in person.

Respondents said that they believe online shopping outperforms the in-store experience along critical dimensions of customer satisfaction, including selection and product quality and variety. The vast majority of customers, whether shopping online or in-store will use a laptop during the shopping journey. For those shopping online, the likelihood of conversion to purchase was rated as high (75%). The tendency to shop via smartphone should also see an uptick, and include a whole variety of mobile payment forms.

Individuals’ total holiday spending is expected to average $1,226, in line with last year, with $430 going toward gifts and $480 going toward events such as holiday entertaining and socializing. Other spending items include gift cards, home furnishings and non-gift items. Non-gift spending is predicted to average $314.

“The amount people are actually spending on gifts remains steady compared with prior surveys, but we’ve watched the mix of total holiday spending shift incrementally over the last five years,” said Rod Sides, a Deloitte vice chairman and US retail, wholesale and distribution leader, in a statement. “It’s the lure of shopping and the experience that is flourishing and likely to remain in high demand—all which bodes well for retailers that have created an experience blending one-of-a-kind items, inspiration, uncomplicated navigation and frictionless transactions.”

Nearly half of respondents said they plan to buy gift cards and clothing. Another 27% said they plan to buy “experiences” for their friends and relatives such as concert tickets, vacations and restaurant meals. More shoppers are projected to complete their shopping after Thanksgiving (54%). Another 26% said they planned to finish their shopping in late November, with 24% looking to complete their holiday purchases before Thanksgiving.

Deloitte’s new survey also found consumers feeling confident about their financial situations, with 81% percent saying their household finances were in the same or better shape than last year. That is up from 63% in 2012. Higher income shopper segments ($100K+) are expected to spend nearly double the market average ($2,226 vs. $1,226). Spending also varies with age, rising through the Baby Boomer generation and then declining significantly among seniors. Younger and higher income segments expect to spend more of their budgets online. Internet leads among all income levels and age groups, but other venue preferences vary by income and age.


  1. http://cbsn.ws/2z9ZBVN – CBS News
  2. http://bit.ly/2zatbdB – Deloitte

Nike Takes on Lululemon as it Expands into Athleisure-wear

Nike Inc. is increasing investments in yoga pants and sports bras as part of a quest to revive growth, intensifying its battle with Lululemon Athletica Inc. for women shoppers. Nike will open pant studios in 5,000 stores on November 1 to highlight new styles for workouts and leisure, the company said in supplemental documents to an investor presentation recently. A presence in thousands of stores would dwarf the footprint of Lululemon, which helped turn yoga and fitness gear into everyday attire. It has 421 locations, mostly in the U.S. and Canada.

Nike, the world’s largest sports brand, plans to spend more on product development for items like sports bras, infusing them with its latest features while also making them more stylish. The company is also revamping its sporty outfits to create head-to-toe looks—these will be unveiled early next year. The moves show Nike is sharpening and refining its strategy after competitors succeeded in recent years at nibbling away some of its market share.

“This $7 billion business will continue to be fueled by more women engaging in sport, wellness and activity,” Trevor Edwards, president of the Nike brand, said during the presentation. “Our growth in our women’s business is outpacing our men’s business, and it will continue to do so.” Lululemon declined to comment on Nike’s moves. The maker of upscale sportswear has largely been able to maintain its revenue growth in recent years even as competition escalates.

This momentum will be tested going forward, and not just by Nike: Amazon.com Inc. is said to be starting an athletic apparel business that also sells items such as yoga pants. Amazon is tapping some of the biggest athletic-apparel suppliers to make a foray into private-label sportswear, setting the stage for further upheaval in an already-tumultuous industry.

Makalot Industrial Co., a Taiwanese vendor that produces clothing for Gap Inc., Uniqlo and Kohl’s Corp., is making apparel for the Amazon line, a person with knowledge of the arrangement said. Eclat Textile Co., another Taiwanese supplier, is contributing to the effort as well.

To cope with a more crowded field, Lululemon has also pushed into areas such as outerwear. In June, the athletic apparel maker unveiled plans to close most of its unprofitable Ivivva stores, and to focus investments online instead. On its latest quarterly earnings conference call, Lululemon management discussed plans to lure more male shoppers to the brand. Lululemon competes in a “very different playground” than Amazon, Chief Executive Laurent Potdevin said during an interview in September.

Executing the plan for women’s workout gear will be key if Nike wants to reach its forecast for high-single-digit growth over the next five years. During the past two years, sales gains have averaged about 6 percent and Nike shares have declined. “We see the opportunity for new growth,” Nike Chief Executive Officer Mark Parker said during the presentation. “We’ve sharpened our approach.”


  1. https://bloom.bg/2zHoyUK – Bloomberg
  2. http://cnb.cx/2i7E5Gh – CNBC

The Good News Is . . .

Good News

  • Sales of new U.S. single-family homes rose in September, hitting their highest level in nearly 10 years, offering hope that the housing market was regaining speed after appearing to stall in recent months. The Commerce Department said new home sales surged 18.9% to a seasonally adjusted annual rate of 667,000 units last month amid an increase in all four regions. That was the highest level since October 2007 and followed August’s upwardly revised sales pace of 561,000 units. More than two-thirds of the new homes sold last month were either under construction or yet to be started.
  • T-Mobile US Inc., a leading telecommunications service provider, reported earnings of $0.63 per share, an increase of 50.0% over year-earlier earnings of $0.42 per share. The firm’s earnings topped the consensus estimate of analysts by $0.17. The company reported revenues of $7.63 billion, an increase of 6.9%. Management attributed the results to strong growth in its overall customer base, and record revenue gains in it prepaid customer segment.
  • Hartford Financial said it would buy health insurer Aetna’s U.S. group life and disability business for $1.45 billion cash in a move that will expand its insurance portfolio and spur its digital technology plans. Hartford will have more than 20 million customers following the deal and stretch its reach in offering workers’ compensation to more mid-size and large companies. The deal will also give Hartford access to Aetna’s digital assets to improve its workers’ compensation and disability claims processes. The assets include an integrated absence management platform. Hartford is the 13th-largest property and casualty insurer in the United States. Aetna will also offer Hartford’s group life and disability products through its medical sales team.


  1. http://reut.rs/2y4S62p – Reuters
  2. http://cnb.cx/2lwnm3s – CNBC
  3. http://t-mo.co/2gMdu51 – T-Mobile US Inc.
  4. http://cnb.cx/2gEDNGk – CNBC

Planning Tips

Guide to Tax Changes for 2018

Tax season is rapidly approaching. The Internal Revenue Service has unveiled some changes for 2018 including cost-of-living adjustments for retirement savings and inflation changes for certain tax provisions. Below are some of the bigger changes that could impact your tax return. Be sure to consult with your financial advisor to determine how your taxes might be affected by these changes.

Higher contribution limits for retirement savings – Employees who participate in certain retirement plans, e.g. 401(k)s, 403(b)s, most 457 plans and the Thrift Savings plan, will be able to contribute as much as $18,500, a $500 increase from the current $18,000 limit.

Deductible contributions to IRAs – Savers who contribute to individual retirement accounts will have higher income ranges following cost-of-living adjustments. Note that the deduction phases out for individuals and their spouses who are covered by workplace retirement plans. For single taxpayers, the limit will be $63,000 to $73,000. For married couples, the phase-out range will vary depending on whether the IRA contributor is covered by a workplace retirement plan or not. When the spouse who is investing has access to an employer plan, the range is $101,000 to $121,000. For individuals who do not have a retirement plan but are married to someone who does, the phase out has been raised to $189,000 to $199,000. The phase-out was not adjusted for married individuals who file a separate return and who are covered by a workplace retirement plan. That range is $0 to $10,000.

Contributions to Roth IRAs – For individuals who are single or the heads of their households, the income phase-out has been raised to $120,000 to $135,000. For married couples who file jointly, the range climbs to $189,000 to $199,000. The phase out was not adjusted for married individuals who file a separate return. That is $0 to $10,000.

Standard deductions – Those who are married and filing jointly will have a standard deduction of $13,000, a $300 raise from $12,700. Single taxpayers and those who are married and file separately will see their standard deduction rise to $6,500. For heads of households, the deduction will be $9,550.

Personal exemption – The personal exemption will grow by $100 to $4,150. The phase-out for this exemption begins at income of $266,700, or $320,000 for married couples who file jointly, and phases out completely at $389,200 for individuals and $442,500 for couples who file together.


  1. http://bit.ly/2x9StUU – IRS
  2. http://bit.ly/2hdyIpf – Forbes
  3. http://cnb.cx/2y3Wm1S – CNBC
  4. http://fxn.ws/2zSvq2v – Fox Business News
  5. https://usat.ly/2yAufWE – USA Today