Holiday sales are expected to grow 3.5%, according to Synchrony Financial. This estimate is in line with the 10-year historical average of 3.3%. Seasonally adjusted sales for November and December 2013 were $505.5 billion, and 2014 sales are expected to top this figure by more than $17 billion. This includes all online and offline purchase made in core retail categories.

This outlook for the 2014 holiday season is based on a number of indicators such as unemployment, gas prices, private residential construction, as well as non-traditional indicators Synchrony Financial identified as effective in developing its forecast. In addition to a steadying labor market, long-term strength in key economic indicators of personal consumption expenditures, consumer credit and residential construction have produced a supportive environment for advancing retail sales. This year, increasing access to consumer credit and improving home equity have helped consumers spend with confidence. Year-over-year through August, consumers made $64.5 billion more in retail sales purchases, after adjusting for seasonality.

“We developed our holiday retail sales forecast, analyzing multiple factors that influence shopping across segments,” said Toni White, chief marketing officer of Synchrony Financial. “These findings are supported by research we conduct in other areas, which indicates consumers are confident, yet cautious in making purchases, and increasingly use digital tools to research, compare deals and buy.”

Retail sales have kept pace with the gradual strengthening of the broader economy. From January to August 2014, retail sales categories of non-store E-retailers and Health & Personal Care led percentage gains and are up 6.7% and 6.3%, respectively, year-over-year. Last holiday season, both of these categories had strong year-over-year performance, as did specialty retailers. Although it is yet to be seen which categories will lead holiday advances in 2014, results of Synchrony Financial’s recently issued third annual Major Purchase Consumer Study indicate that while consumer confidence is rising, value overwhelmingly drives a major purchase decision, with more than 88% of accountholders surveyed, indicating they “always seek the best deal.”

Similar to last year, there is a shortened shopping period of 26 days between Black Friday and Christmas 2014, compared to 31 days in 2012. This impact to the full two-month holiday sales period is mitigated by consumers’ shift to online and mobile shopping. The accessibility afforded by these channels has reduced delayed purchases of hard-to-find products and late season, in-store deal shopping. For the Q4/13, e-commerce sales accounted for 6% of total retail sales, and were up +15.7% from the previous year.