Total retail sales for the holiday season of November and December will grow by 3.1% in 2017 to $929.15 billion, according to data from eMarketer. That sounds like good news, but it's actually less than the 4.5% growth experienced during last year's holiday season. It's not that people are shopping less or not buying as much. Instead, sales totals are being driven down by increased discounting.

This holiday season growth rate is also below the expected 3.8% that retail sales are expected to grow in the United States for the full year. Again, that's due at least in part to intense competition between retailers driving prices lower.

A person holds gift packages.

Discounting is expected to be a theme. Image source: Getty Images.

The balance continues to shift

While it seems like online retailers have taken a huge piece of the market, they only accounted for an estimated 10.2% of total holiday season retail sales last year. That was actually the first time they crossed 10%, but the number has been steadily ticking up.

In 2017, eMarketer expects online retail sales to grow to 11.5% of total sales. That's an increase from $91.76 billion last year to $106.97 billion in 2017. 

"Retail overall is doing pretty well, but growth is uneven," said eMarketer Senior Analyst Yory Wurmser in an email to The Motley Fool. "Some sectors, particularly department stores and chains dependent on mid-level malls, are experiencing a sharp fall in traffic and sales. Others, such as dollar stores and luxury are doing well. So underneath the generally positive numbers are spots of real turmoil and contraction."

Sales are shifting as to which brick-and-mortar stores people shop at. In addition, overall growth at physical retailers has slowed. During the 2017 holiday season, non-digital sales are expected to rise slightly to $822 billion from $808 billion last year.

Digital growth is being pushed by "increases in mobile commerce and the intensifying online battle between large retailers and digital marketplaces," according to eMarketer. At 11.5% of total holiday retail sales, digital sales would outpace their expected full-year portion of 9%.

How accurate are these numbers?

eMarketer makes its forecast by analyzing "quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies." The company regularly tweaks its formula to reflect changes in technology and the overall economy.

In 2016, the research firm predicted total holiday sales would be $884.50 billion. The actual number, according to an email from the company, was $900.89 billion, putting the prediction just under 2% off. The company was equally close when it came to digital sales, predicting $94.7 billion when the final total was $91.76 billion, a 3% difference.

These predictions indicate that the slow march to more sales moving online continues, but brick-and-mortar retailers still have the vast majority of the business. That means that while many traditional physical chains will continue to suffer, there's still a significant customer base shopping in actual stores.

That creates a challenge for struggling chains like Sears Holdings that may be entering a make-or-break holiday season. Sears and Kmart need to find ways to get customers into the stores that go beyond price. That's a big challenge for the shrinking company.

Chains that can give shoppers a reason to visit -- with discounts, exclusive merchandise, and even in-store events or entertainment -- still have a chance to succeed. That's going to keep getting harder as digital convenience grows, but in 2017 there remains room for some brick-and-mortar chains to grow year-over-year comparable-store sales.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.