Holiday Sales Forecasts: Black Magic or Science?

ShopperTrak, which collects data from some 60,000 retail locations worldwide (about 80 percent of those in the U.S.) expects holiday sales to be up 2.4 percent from last year. ShopperTrak's founder, Bill Martin, tells ABC News his forecasts excludes online sales and take into account only those from brick and mortar stores.

ShopperTrak's prediction last year was an increase of 2.5 percent. Its 2011 prediction was for an increase of 3 percent, versus an actual increase of 4 percent.

Martin says his company has been making holiday predictions for 17 years. "We've seen a lot of other metrics come and go," he says, noting that Mastercard used to make a holiday prediction but no longer does. Those predictions for which he has the most respect are his own, the NRF's and the one done by the International Council of Shopping Centers.

"We capture data," he says. "Others take a survey of what consumers believe will happen."

Kleinhernz at the NRF says he uses a model that takes into account what's going on in the macro economy. Its components include monthly census retail sales reports, employment data, income data, credit card use, retail sales of food and beverage, and an estimate of e-commerce. He also factors in any geopolitical uncertainties that might cause shoppers to hold back.

How did NRF do last year? "We underestimated," says Kleinhernz. "We were close, but we didn't hit the nail on the head." In 2012 NRF's projected forecast was that holiday sales would increase 4.1 percent, versus the 3 percent final figure.

He views as suspect any predictions based on private, proprietary data. "It's important they be based on public data sets," he says. "With private data, how are you ever going to know if that data's right or wrong?"

He bridles at any suggestion that the phrase "cottage industry" applies to what he does. "I've been an economist for 30 years. I do surveys for the Fed—in Philadelphia and in Chicago."

There may be predictors dazzled by "Christmas trees and lights," but he isn't one of them. "I take great pride in our work. We don't always get it right, but we do the best we can."

Meanwhile, retailers are already gearing up for the season.

Toys R Us has already released its "hot-list" of what it hopes will be its best-selling toys, including a hugging Elmo doll by Hasbro ($59.99), a Razor Crazy go-cart ($399.99), and a loom that lets kids make rubber band bracelets ($14.99).

Kmart has aired its first holiday commercial—100 days before Christmas. The company, in a statement to ABC News, says it isn't so much jumping the holiday gun as it is trying to do shoppers a favor: "Customers can plan in advance in order to take advantage of layaway for holiday purchases."

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