For both consumers and retailers, the 2020 holiday season has been unlike any other.
The consensus among retail forecasters is that consumer spending will be robust during the holiday season, despite the pandemic. But the sales boost won’t be shared equally.
The retailers who benefit will be those that adapted quickly to the pandemic-triggered trends and were ready for a different kind of holiday season.
These holiday shifts are expected to continue well into 2021, according to retail experts who spoke to CO—.
For retailers, every day feels like Cyber Monday
This year, online retailers were consistently seeing Cyber Monday-level demand starting in April. “What we were hearing in April and May from e-commerce executives was that every day feels like Cyber Monday,” said Scott Silverman, co-founder of CommerceNext.
Silverman expects consumers who moved online during the pandemic will stay there, to a large extent, in 2021.
“I believe that people are going to continue to enjoy the convenience,” he told CO—.
Mario Ciabarra, CEO of digital services firm Quantum Metric, agrees. His retail clients saw five times their normal online traffic in April and he believes that surge will continue into the spring and beyond. “I would make a prediction that a year from now we’re going to see it as well,” he told CO—.
A curbside Christmas, and a curbside New Year
Curbside pickup was a pandemic hit for retailers, and it became even more popular during the holiday season. It likely is here to stay, Silverman said.
“Customers love curbside pickup,” he said. “You’re delivering that much more convenience to the customers and customers have made it pretty clear that they appreciate convenience.”
I believe that people are going to continue to enjoy the convenience.
Scott Silverman, co-founder, CommerceNext
Stores became a strategic advantage
As online orders surged and e-commerce giant Amazon encountered shipping delays and out-of-stocks, retailers like Walmart, Target and Best Buy used their physical stores to their advantage.
Retailers with effective omnichannel strategies were able to have the best of both worlds, taking orders online and using their stores as fulfillment centers, with customers solving shipping problems and reducing costs by picking up the orders in stores or curbside.
Stores give retailers a way to avoid “shippaggedon” shipping nightmares, said Tom Forte, managing director and senior research analyst at D.A. Davidson Companies, in a holiday panel discussion attended by CO—.
“I do think that when Amazon Monday morning quarterbacks COVID-19, they’re going to wish they had a larger physical [store] footprint,” Forte said.
The best [business] size for retailers this holiday? XL or S
The first sales reports showed that the biggest retail winners this holiday season are the very big and the very small. Data collected by Adobe Analytics over the Black Friday/Cyber Monday weekend found that e-commerce giants with over $1 billion in yearly revenue, and small retailers with sales of $10 million to $50 million, outperformed all others, with sales for both groups up more than 300%.
Big retailers had the scale and resources to ramp up their omnichannel offerings, while small retailers showed they were nimble enough to pivot effectively to respond to the pandemic.
Tough holiday season at the malls means shakeups in 2021
Malls have struggled mightily this holiday, with traffic down drastically. After the Black Friday weekend, Sensormatic Solutions, which supplies stores with traffic counting devices, reported that in-store traffic was down 52.1% on Black Friday, compared to 2019, and down 94.9% on Thanksgiving, when many stores opted to remain closed after years of being open on that holiday.
Mall retailers also have been hurt because it is more difficult for them to do curbside pickup, D.A. Davidson analyst Michael Baker said during the holiday discussion.
With more retail bankruptcies and store closings expected in 2021, malls makeovers will be accelerated, with more mall owners adding residential and other mixed-uses to be less reliant on retail.
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