As part of our recurring #ShiftHappens series, we surveyed top retail executives and industry thought leaders to help identify the ways in which the COVID-19 pandemic has changed today’s retail consumer.
In this month’s release, we share Holiday 2020 predictions procured from our retailer collective as well as key insights from:
Liz Alessi, VP of Sourcing at Tapestry
Monica Aranado, Chief Merchandising Officer at Ulta Beauty
Courtney Hawkins, VP of Retail at The RealReal
Laura Heller, Retail Analyst and Contributor at Forbes
John Horten, VP of Operations at Draper James
Miya Knights, Head of Industry Insight at Eagle Eye Solutions
Sucharita Kodali, VP and Principal Analyst, Retail at Forrester Research
Andrea Lisbona, Founder and CEO of Touchland
John Pruban, President of Level 10
Rose Spicer, Head of Global Retail Marketing at Oracle
With early e-commerce deals already underway and many major retailers keeping the lights off this Thanksgiving, there’s no doubt that Black Friday 2020 will be unusual. Target, for example, eliminated its early morning shopping hours on Black Friday. Instead, shoppers will be able to reserve line spots remotely and pick up curbside orders. These changes have many of us wondering if Black Friday will live on as we once knew it.
“More Black Friday sales will migrate online, putting extra pressure on e-commerce IT infrastructures, as well as supply chain distribution and delivery networks. In the run-up to Black Friday, retailers should stress-test servers and distribution capacity or risk a potential crash-and-burn.”
“Black Friday broke the best of them in a regular year and is particularly more difficult to serve the customer online with order fulfillment throughout the season. By starting earlier, and front-loading orders, retailers will have more time to adjust, to adapt, to fulfill, and to suggest the replacements that are going to be needed when people run out of items that have been ordered in the days before and after Black Friday.
I just think that it’s a hodgepodge and it’s not going to be nearly as neat as people are hoping.”
“I think this is an incredibly unusual year and retailers are doing things as much out of necessity as anything. They can’t have crowds in stores and they need to space things out. And even in the case of Amazon, even though they don’t really have that many stores, they have to be worried about crowding and the distribution center.
Is it going to continue forever? I think there are elements that will certainly continue into the future because we know that early sales are going to definitely continue. But is this tradition of the doorbuster on Black Friday going to go away? I don’t think so.
“When you look at the holiday season in general, Black Friday has been losing its momentum. It’ll be interesting to see how the retailers actually manage all the different things happening in-store when it’s put to the test with increased traffic. And that could be curbside pickup lines, lines to get into the store, and same-day delivery. This is a time when retailers can’t let the consumer down because the consumer will go somewhere else.”
This is a time when retailers can’t let the consumer down because the consumer will go somewhere else,” Courtney Hawkins, VP of Retail at The RealReal
The COVID-19 pandemic has expontentially acclerated the growth of e-commerce and has no plans to stop for St. Nick.
“Overall, retailers are going to feel the effects of changing consumer shopping behaviors. With the majority of the country on the cusp of a second wave of COVID-19, it’s clear that this year a lot of holiday shopping will be done online.To keep employees and guests safe and deliver exceptional customer service this holiday season, the overarching theme for retailers comes down to one thing: mobile, mobile, mobile.”
To keep employees and guests safe and deliver exceptional customer service this holiday season, the overarching theme for retailers comes down to one thing: mobile, mobile, mobile,” John Pruban, President of Level 10
“The rise in the adoption of e-commerce and omnichannel services like home delivery, curbside pickup, and BOPIS sees no sign of abating.”
“There is so much that’s accelerated this year in the retail space. From how guests shop and safety standards to increased e-commerce and, in beauty retail, a fresh look at discovery. Each of these has made significant impacts in retail and many are certainly here to stay, creating ample opportunity for innovation.
“I think we’ll see a lot of curbsides through much of Q4. Retailers will need to be really careful about how they promise curbside pickup for holiday specials.”
During a recent poll with our retailer collective, we asked participants to identify the areas they believe will pose the greatest challenge to retailers during the 2020 holiday shopping season. Of those who responded, 67% said inventory management will be the greatest challenge for retailers while 33% said shipping and outbound distribution will be the trickiest to navigate during this year’s holiday season.
“While the pandemic caused a surge in online shopping, Oracle’s survey showed that nearly 20% of shoppers surveyed plan to do most of their shopping in-store with 47% planning to split purchases between online and brick-and-mortar shops. For retailers, this is both an opportunity and a challenge—while it is great that they’ll have customers in-store, incorrectly managing inventory will be the fastest way for retailers to end up on this year’s naughty list.”
Oracle’s survey revealed that 47% of holiday shoppers across the globe said out-of-stock merchandise topped their list for a bad shopping experience. During the holidays, it will be imperative for retailers to manage their inventory, fill their shelves and use their physical locations both to serve shoppers and as fulfillment centers to handle online orders and get shipments out to customers expeditiously.
For brick and mortar retailers, we are anticipating a lower YOY growth than we are accustomed to. In order to adapt to the ever-changing landscape and accommodate consumers’ needs, the trends I see being leveraged the most are BOPIS, curbside pickup, same-day delivery, and ship from store.
While many merchants have already reprioritized IT projects to accelerate contactless payment, BOPIS, curbside pickup, etc., some retailers still need to make adjustments or deploy new technology in anticipation of a holiday shopping season that looks different than any other before—and quickly!
“The cutoff date for shipment of gifts is an important factor if companies are looking to increase revenue earlier in the quarter with travel concerns and quarantine times. Additionally, many companies are still working through inventory and liability so we will see a general contraction in new products in many sectors.”
“A condensed calendar coupled with expected fulfillment and shipping delays will shorten the online holiday selling season. To combat, retailers will try to capture sales early.”
With COVID-19 cases on the rise in the United States, safety and sanitation will remain top-of-mind for holiday shoppers. At the same time, consumers are craving human connection and increased customer service. As such, retailers must learn to meet customers at the intersection of safety and service.
“Consumer expectations of retailers and of online and offline shopping experiences— already constantly changing—have been dramatically impacted by new behaviors and perceptions that have developed in the context of the global pandemic. The year continues to redefine what it means to have a superior consumer experience, from speed and selection all the way to safety and sanitation. But despite the challenging year, we predict this will be an active season for retail.”
“COVID-19 is the biggest unknown factor with numbers rising and cold weather on the way. I think the recent strong sellers will continue: fitness, self-care, and home stuff like kitchen and creature comforts. Companies are definitely struggling with staffing vs. health concerns, especially considering most of us have been working from home for eight months.”
“Like our guests, we are approaching holidays differently this year. While different, this season is still full of joy. We know there is still a deep desire for connection and togetherness, more time with loved ones, more comfort, and more self-care. The passion and emotional connection to beauty remain. At Ulta Beauty, we believe our role is to help guests see the joy with beauty.”
“Our most urgent retail store priority throughout this pandemic has been to provide a safe environment for our store teams and customers while meeting our societal and financial obligation to provide open stores. This year’s holiday season will continue to present several continued challenges in how we engage with each other.”
As the traffic increases for the holiday shopping season, although likely significantly below last year, it ultimately represents COVID-19 exposure to employees at any given store. The fear that retail teams express, not only for their health but for those they love, is immense. Their health, their livelihood, their family, and friends are all at stake, so the pressure to not become infected is undeniably always their top priority.