What’s in Store for Retail Sales This Holiday Season?
We know the 2020 Holiday Season is going to be unlike any other. The big question is what will it look like? How can retailers prepare for changing consumer behaviors? With Black Friday—traditionally the kickoff to the Holiday Season—losing steam with consumers over the last five years, let’s take a look at how some of the ahead-of-the-curve retailers are already preparing for the first Holiday Season with Covid-19.
How Smart Merchandising Strategies Can Win the Day for Retailers
We believe the retailers who will fare the best in the (hopefully short-lived) Covid-19 era will be the ones who employ Smart Merchandising strategies. Right now, consumers are looking for a convenient shopping experience. For brick and mortar retailers, matching the “endless aisles” of e-commerce means adopting new and innovative merchandising strategies. New approaches to merchandising are critical to anticipate shopper demand and make the entire process more manageable. Some recent innovations include:
- Augmenting product availability with resale
- Leveraging micro-brands to match shopper preferences
- Using Artificial Intelligence, Machine learning (AI/ML) based fulfillment system
As Deloitte put it in their 2020 retail industry outlook, “By combining investments in AI and ML technology solutions and rewriting sourcing policies, retailers can be at the forefront of convenience, providing real-time product availability without having to accumulate unsold inventory.”
Smart Merchandising is clearly on the way up for retailers. The same cannot be said for the most infamous shopping day on the calendar.
Black Friday in Decline
It looks like all those videos of crazed shoppers stampeding into stores for Black Friday has finally scared consumers away. For the last five years or so, Black Friday as a cultural event has lost some of its steam. As Neil Saunders, retail analyst and managing director at GlobalData Retail said in a recent interview with CNN Business, “Black Friday has definitely transitioned more into a digital affair in the past five years. The focal point is not that single day anymore. It’s an event spread out over several days.” And with Covid-19, the future of Black Friday as a retail event is very much in doubt—at least until there’s a vaccine.
More and more, forward-thinking retailers are coming up with a different strategy. Macy’s is shifting its focus to online deals for Black Friday. They’re also considering getting started much earlier, potentially right after Halloween. Walmart has opted to end it’s long tradition of opening stores on Thanksgiving. Another big part of the plan to boost retail sales this Holiday Season: expanded curbside pickup.
Is Curbside Pickup the Answer for Struggling Retailers during Covid-19?
Buy online, pick up instore—or, near store. Curbside delivery has seen its popularity skyrocket since social distancing became a part of life. It’s an ideal solution for big box retailers and retail behemoths such as Walmart and Target. They have the space (and most importantly, the parking lots) to accommodate a high volume of customer traffic. It’s not as simple, however, for your typical indoor mall retailers. If you’re one of 200 tenants in a large shopping mall, curbside pickup is extremely difficult to implement. There’s the lack of parking spaces. Consumer confusion on where to meet to get their merchandise. And lack of staffing to implement a robust curbside pickup program. Many malls are working to accommodate the growth in curbside pickup, with special signage to guide customers to the right spot. It’s not perfect, but customer report overall satisfaction with the process. Which is a net positive heading into the 2020 Holiday Season. Because until there’s a Covid-19 vaccine, it looks like curbside pickup is here to stay.
As retail enters an uncertain Holiday Season, one unlikely category has seen explosive growth in the era of lockdowns and social distancing.
Dollar Stores Rack Up Record Sales
Times are tough right now. And when times are tough, shoppers look for bargains. Which is why Dollar Stores have been outperforming essential retailers in Q1 2020, and are poised to see even more growth in the months ahead.
You could not ask for a better crystallization of the service Dollar Stores provide for customers in tough economic times than this quote from Mike Witynski, Enterprise President at Dollar Tree, which owns both the Dollar Tree and Family Dollar brands, “When people are unemployed and they don’t have that source of income, they will need value more than ever.”
Dollar Stores have been thriving since the COVID outbreak. Family Dollar has seen same-store sales expand an eye-popping 15.5% in the first quarter of 2020. And this summer, smart innovations from Family Dollar should continue their hot streak. They play to expand their freezer and cooler sections, to provide welcome relief as the temperatures climb.
Another reason for the performance of Dollar Stores is, to borrow a term from real estate, all about location, location, location. During the Covid-19 shutdown, people aren’t venturing far from home. Dollar General’s 16,000 locations are within five miles of more than 75% of the U.S. population. And with quick shopping times and limited crowds, the stores are actually a great fit for the social distancing era.
What do you think is in store for retail this Holiday Season? Have you had any personal experiences with curbside pickup you’d like to share? Have thoughts on Smart Merchandising strategies? Let us know in the comments section. We want to hear from you.