Scenes of deal-hungry shoppers trampling each other for doorbuster Black Friday sales is among the holiday traditions being upended this year by the coronavirus pandemic.
Major retailers like Target, Walmart and Best Buy have announced that they will be closed on Thanksgiving Day, which has become the unofficial kickoff to the busiest shopping weekend of the year.
According to the National Retail Federation
, a record 189.6 million U.S. consumers shopped from Thanksgiving Day through Cyber Monday last year. Black Friday, when stores hope to go “into the black” and begin turning a profit, was the busiest day for in-store foot traffic in 2019, with about 82.4 million shoppers.
, associate professor of marketing, entrepreneurship and innovation in the Manning School of Business
, says that with COVID-19 cases surging across the country and consumers leery about heading inside packed malls and stores, retailers are going to be more dependent than ever on online shopping this holiday season.
“We’ve seen sales increasing on Cyber Monday in recent years, and I would expect that number to go up even further this year,” says Huang, who teaches courses in retailing and global marketing and is currently researching supply chain disruption. “Cyber Monday will be big, but it will be more of a cyber holiday season overall.”
Indeed, many retailers have already begun rolling out deals online to get a jump on the holiday shopping season — a season complicated by not only a public health crisis, but also an economic crisis. Unemployment is hovering at around 7%, and a recent Deloitte survey
showed that 40% of holiday shoppers expect to spend less this year than in 2019 because of economic concerns.
“I’m sure people will still go shopping in stores this holiday season. That kind of shopping experience is irreplaceable for consumers.” -Assoc. Prof. Ying Huang
With all that in mind, we asked Huang to share her thoughts on the holiday shopping season — and the state of retail in general.
Q: Nine months into the pandemic, how has the retail industry been impacted?
The impact varies. Retailers with physical brick-and-mortar stores have been hit hard, as have small businesses. But online retailers like Amazon are doing really well. We’d already been seeing this shift from brick-and-mortar to online, but the pandemic has accelerated that shift.
Q: What does that mean for the future of brick-and-mortar stores?
Ecommerce is with us no matter what, but I don’t think it’s going to be the end of the physical store. It’s really about doing this multichannel or omni-channel strategy — reaching consumers in different channels and integrating those channels to provide a seamless experience. A coexistence of online and brick-and-mortar, like the growing popularity of curbside pickup during the pandemic, is key. Small businesses may not have the resources to do as well online, but if they want to survive, they have to think about ways to compete online in some sort of niche market.
Q: What does this holiday shopping season mean for retailers?
It’s going to be an opportunity for retailers to come back from a down year. I would expect very intense competition. For retailers trying to survive during this difficult time, it’s important to maintain their cash flow. The retail industry relies heavily on cash — they need cash to pay employees and buy new inventory. So I think the price competition is going to be really intense. We have already seen that the past several months, but I imagine we’ll see it even more during the holiday season. Unfortunately, I do not like price competition from the retailer’s perspective.
But right now, this is the easiest way to get rid of inventory.
Q: Why don’t you like price competition?
Price wars can lead to economically devastating situations that take a significant toll on industry profitability. And price wars can drive consumers to be more price sensitive. No matter who wins, the retailers all seem to be worse off.
Q: Do you expect shoppers will still flock to malls and stores despite the pandemic?
I’m sure people will still go shopping in stores this holiday season. That kind of shopping experience is irreplaceable for consumers who love that kind of social interaction with family or friends. People look forward to that kind of retail atmosphere, so I don’t think it’s going to be entirely online. And for a lot of products, you have to go into the store and touch it and feel it. That instant satisfaction is important.
Q: When stores were allowed to reopen earlier this year, were you surprised that shoppers were eager to return?
There’s definitely a consumer shopping habit, so I was not surprised at all. After staying at home for a couple of months without buying much besides groceries or shopping online, I thought it was pretty normal for shoppers to get back in stores, even though they were required to wear masks and maintain social distance. People may think that wearing a mask is inconvenient, but now it looks like it’s part of our new normal.
Q: This year, dozens of established retailers including Lord & Taylor, Neiman Marcus and J. Crew have filed for bankruptcy. What’s your outlook on the retail industry?
I have confidence in the retail industry. We’ve seen lots of bankruptcies this year — the last I read, more than 40 retailers have filed, which is the highest number in the past decade. But I do think the traditional brick-and-mortar retailers who have contingency plans, who can deal with changes in consumer demand and manage their supply chain, they’re not only going to survive but grow.