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research agency Forrester, online holiday sales are going to hit historic highs this year.Moreover, despite low morale and millions of job losses, the retail sector has somewhat bounced back, thanks to e-commerce sales, and rising consumer spending.

Online Holiday Sales to Hit New High

According to Forrester, online holiday sales are projected to touch $173 billion compared with $139 billion in 2019. This suggests 24.4% year-over-year growth. E-commerce has been the mainstay of retail sales since the coronavirus outbreak and is expected to play a major role this holiday season too.

The holiday season is considered the two most important months for retailers across the United States and this year isn’t going to be any different. In fact, the crucial months of November and December are projected to account for almost 20% of the total U.S. retail sales for 2020.

E-Commerce, Other Factors Boosting Retail Sales

E-commerce so far has played a major role in saving the retail sector during the pandemic. The trend is likely to continue given that fears of another wave of the pandemic have already gripped millions, who would continue shopping online.

Although the morale of the retailers is still low, they have been on a hiring spree ahead of the all-important holiday season. Retail sales too have been on the rise for the past six months after hitting a nadir in April and May.

Moreover, hopes of a second round of stimulus may once again boost the purchasing power of consumers. Also, consumer spending has been on the rise, which is an indication that people are willing to spend.

Our Choices

Although fears of a second wave of coronavirus have gripped the nation, positive news on the vaccine front have also somewhat lifted the spirit of both consumers and retailers. Despite that people are likely to prefer shopping online keeping in mind the safety concerns. Investors thus hopeful of a fruitful holiday season for retailers should tap the following retail stocks, with a strong online presence.

Best Buy Co., Inc. (BBY - Free Report) is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. 

The company’s expected earnings growth rate for the current year is 18%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. Best Buy presently carries a Zacks Rank #2 (Buy).

Overstock.com, Inc. (OSTK - Free Report) is primarily an e-commerce service provider. The company sells its broad range of price-competitive products, including furniture, home decor, bedding and bath, and houseware through its www.overstock.com, www.o.co and www.o.biz websites.

The company’s expected earnings growth rate for next year is 1.8%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. Overstock has a Zacks Rank #2.

Systemax Inc. (SYX - Free Report) is a direct marketer of brand name and private label products, including personal desktop computers, notebook computers, computer-related products, and industrial products, in North America and Europe. 

The company’s expected earnings growth rate for next year is 22.3%. The Zacks Consensus Estimate for current-year earnings has improved 26.9% over the past 60 days. Systemax has a Zacks Rank #2.  

Target Corporation (TGT - Free Report) has evolved from just being a pure brick & mortar retailer to an omnichannel entity. The company has been investing in technologies, improving websites and mobile apps, and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players.

The company’s expected earnings growth rate for the current year is 13.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. Target carries a Zacks Rank #2.

Fiverr International Lt. (FVRR - Free Report) provides an online marketplace for selling goods and services. The company provides logo, poster and brochure designing, as well as photoshop editing, content marketing, web analytics and translation services.