Bloomberg Businessweek October 12, 2020 pp16-17 |Business| “Why Black Friday Could Be Blue”. “Pandemic fears, social distancing, and job losses may damp shoppers’ holiday madness”. Bottom Line “Department stores and apparel merchants typically do a quarter of their business in November and December. But this year, Covid has brought uncertainty to their holiday haul”
Malls and other on-site stores will provide options for those willing and needing that in-store experience.
2244 looks forward to the Holiday season but rather than visiting the mall expects to experience any rush in holiday gift-giving by an increasing traffic of delivery vans from FEDEX, Amazon, USPS, and UPS among others. Read the full article at BW for more detail.
Online shopping a big push by all retailers. Photo Credit nypost.com
4th Quarter sales as a share of annual sales in 2019 from low to high fraction: Walmart 27%, Gap 28%, Nordstrom 29%, Target 30%, American Eagle 31%, Williams Sonoma 32%, GameStop 34%, Macy’s 34%, Kohls 35% and Best Buy 35%. A sales quarter, all things being equal, should account for 25% of sales but as you can see it is more significant for most top retailers of consumer goods.
Summary of Article
Not surprisingly, shoppers that will be relatively unscathed in spending will be those in the upper income brackets but most shoppers will be reluctant to do much shopping on-site. To accomodate to the Covid-era, stores will offer more safety plus some options for those that are willing or feel the need to shop in-person. Nieman Marcus will allow “Clientele who don’t feel comfortable wandering the aisles can book private rooms where associates will bring them Louboutin pumps and Ferragamo ties.” Others like Lululemon Athletic Inc. will continue a recent trend in having Pop-Up locations and smaller hubs in malls. To ease the burden, on sales for November and December, seems all retailers are emphasizing earlier spending and consumers are responding to events like 10.10, Amazon Prime Day October 13 and Home Depot offering “Black Friday-esque” sales after Halloween. All retailers having experienced the erosion of on-site buying, over the last few years, are increasingly focused on selling online.
Having said all this the health restraints brought on by Covid had made for bad retail economics. Many that are out-of-work, unemployment double 2019 at 7.9%, and others that are “worried waiting” will be careful in spending even on bargains. So far 2020 retail sales are down $122B. Many "brick and mortar"retail operations have subsequently closed for good. “Sales at clothing and accessories stores plunged 34.9% in the first eight months of 2020.” “Total holiday spending on average is expected to be up 1.5%” Vs. 4.1% last year this according to Deloitte LP.