Did CDC’s announcement boost retail’s online sales prospects for Christmas?

Discussion
Photo: @C5Media via Twenty20
Sep 29, 2020
George Anderson

The Centers for Disease Control and Prevention wants all those Americans who have made Black Friday shopping trips an annual event to stay far away from the mall and retail stores this year.

The government agency has issued a list of activities around Thanksgiving and throughout the holiday season and ranked them into three categories — low, moderate and higher risk — to try and prevent a surge in the spread of the novel coronavirus pandemic. Topping the list of higher risk activities is shopping “in crowded stores just before, on, or after Thanksgiving.”

Around 205,000 Americans have already lost their lives to the virus and medical experts have been warning for months that the country may face a surge in new cases as colder weather forces people inside in more closed quarters. The numbers of diagnosed cases have jumped 15 percent over the past two weeks, with fatalities a lagging figure.

Retailers have been setting the stage to try and space crowds out during the holiday season by beginning holiday promotions at the beginning of October instead of waiting for the week of Thanksgiving. Amazon.com has set its annual Prime Day sales event for Oct. 13 and 14. Coresight Research and Shopkick have teamed up to enlist retailers to participate in the first 10.10 Shopping Festival in an effort to replicate the success of Single’s Day (11.11) in China.

Holiday season sales were already shifting to online channels in past years and that was before COVID-19 became part of the American lexicon. Online sales jumped 14.1 percent last year, well ahead of the 4.1 percent overall growth for the industry, according to the National Retail Federation.

Deloitte has forecast online sales growth between 25 and 35 percent this holiday season. The consultancy expects sales for the holidays to be flat to up 3.5 percent, depending on a number of factors including the spread of the virus and its impact on the economy.

COVID-19 has led Americans to shop online more frequently this year than before the health risk arose. In the process, many discovered and liked the ease of purchasing goods in this manner. Others have found that delivery, curbside and in-store pickup options are more convenient than walking around stores and waiting on checkout lines.

DISCUSSION QUESTIONS: Will earlier promotions, recent changes in consumer shopping behavior and social distancing/face covering measures dramatically reduce crowds in stores this holiday season? Will the experience this year have a significant effect on how Americans shop during future holiday seasons?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"We will see much more aggressive online campaigns and activities prior to and during this year’s holiday season."
"The responsibility falls on retailers to keep consumers and employees safe. I’d opt for online sales or curbside pickup during this tumultuous year."
"Will people give fewer gifts? If families don’t get together, will splurges on food be irrelevant?"

Join the Discussion!

29 Comments on "Did CDC’s announcement boost retail’s online sales prospects for Christmas?"


Sort by:   newest | oldest | most voted
Mark Ryski
BrainTrust

COVID-19 will have a profound impact on this year’s holiday season. The CDC alert is bad enough, but the normal flu season will exacerbate an already difficult year for retailers. While it’s impossible to predict the long term impact COVID-19 will have in the future, what is clear is that the influence of online shopping and online to store services like BOPIS/curbside are here to stay.

Neil Saunders
BrainTrust

The CDC just states what most people should already know: crowded environments increase the risk of viral spread. Retailers are aware of this which is why so many are looking to reduce crowding in their stores by spreading holiday promotions over a longer period of time and by using online to drive sales. I don’t think the CDC’s statement will change the trajectory of online which is going to get a nice bump over the festive period.

Chris Buecker
BrainTrust

A definitive yes. Hotels are empty, airports are empty, entertainment places are empty. What would make consumers return to stores when the pandemic will still be around? We will see much more aggressive online campaigns and activities prior to and during this year’s holiday season. My assumption is that when the pandemic is under control, consumers will return to malls and stores, however the online share will remain higher than pre-COVID-19.

Michael La Kier
BrainTrust

Let’s start by saying if we all listened to the CDC things would be different — but then again they keep changing what they are saying. Winter is coming and retail will certainly feel the chill. There’s no doubt that retail sales will be impacted by COVID-19 during the holiday season. The crowds are starting to come back, but the chill of winter and the specter of the flu are likely to dampen in-store buying further.

Brett Busconi
Guest

We have enough data to know that crowds are going to be dramatically reduced in stores this holiday season — certainly in smaller, mall-based stores the occupancy restrictions in some areas already are making any sort of consistent store traffic next to impossible. For the Supercenter stores, I do think there will be large numbers (can it be more than normal faced with occupancy limitations in some spots? No) and they may go beyond what they did last year.

Earlier promotions and aggressive e-commerce strategies are absolutely going to be key for some retailers to try and keep sales going and another opportunity for the usual suspects to pick up more ground.

I do think that the experience this year will have a significant effect on how Americans shop for future holiday seasons, but likely a smaller one than most will predict. Many are going to struggle with how they get through this holiday shopping cycle and will be eager to return to how they previously did things.

Richard Hernandez
BrainTrust

All I will say here is that if retailers have not yet prepared to handle the load of BOPIS or curbside, they better buckle up and get to working towards a solution. There is no sign that these options will be slowing down anytime soon especially going into the holiday season.

Jeff Sward
BrainTrust
The CDC announcement was merely an exclamation point on a conclusion many retailers and shoppers had already come to. The pandemic caused the shift in Prime Day. It has created 10.10. It has lead retailers to announce promotions starting in October. It will give rise to a stronger profile for 11.11 (Singles Day) in the U.S. I was in a mall about three weeks ago that seemed quite busy for a weekday. It was because all the stores were monitoring their in-store headcount and make people wait in queues outside the store. So the stores were successfully monitoring social distancing but the main corridor was full of people who otherwise would have been inside stores. The density just shifted. So absolutely the traffic patterns that might usually occur over six weeks need to be spread out over three months. Some people will take advantage of that and some won’t. But inevitably online shopping will explode in the last couple of weeks. Drivers of delivery vans are in for a harrowing season. (And maybe this is… Read more »
Scott Norris
Guest

Your description of shifting and bunching the crowd gave me chills, recalling how terror attacks at Brussels and Istanbul focused on the *queues themselves* to get into security checkpoints. It’s where we are at our most vulnerable, and it’s exactly what the virus wants us to do.

Lisa Goller
BrainTrust

Yes, this holiday season more consumers will make online shopping as much of a tradition as feasting on turkey.

A confluence of factors makes e-commerce more alluring than physical stores this fall, including:

  • Health and safety risks during the pandemic’s second wave;
  • Non-stop online promotions throughout Q4;
  • More consumer experience and comfort with e-commerce since March;
  • Investments in robust e-commerce supply chains for superior service;
  • Core benefits of convenience, ease and time savings.

Compared to Q1, the U.S. e-commerce infrastructure is now more mature and consumers are more conditioned to consider online options. As a result, 2020 will emerge as the pivotal year that Americans started to make e-commerce an enduring holiday shopping habit.

Dick Seesel
BrainTrust

The kinds of massive crowds I used to associate with Black Friday have become a thing of the past anyway. Between Thanksgiving Day store openings (not a factor in 2020) and online shopping, the significance of that one big day has been fading for over 10 years.

There is no doubt that COVID-19 will play further havoc with high-traffic days — at least I hope so, for the sake of public health. But the credibility of the CDC has been so compromised in recent months that it has little effect on risky behavior — it’s up to the retailers to manage the promotional calendar and crowd control to keep things safe while keeping up their sales volume.

Georganne Bender
BrainTrust

According to that same CDC directive it is suggested that we enjoy our Thanksgiving dinners outside. Have you been to Chicago in November?

COVID-19 directives have been all over the place; consumers don’t know what to believe. Certainly online sales will be big this holiday but don’t count out consumers who will brave the virus and the weather to visit stores.

George Anderson
Staff

My guess is that the CDC was thinking of warmer climbs with that particular recommendation. ;o)

Georganne Bender
BrainTrust

That’s part of the problem! 🙂

Craig Sundstrom
Guest

“Over the river and thru the woods, to the temperature check we go!”

(Sung remotely over the Zoom Holiday Assembly….)

Georganne Bender
BrainTrust

That’s the new holiday theme song!

Brandon Rael
BrainTrust

Just as digital touchless commerce was an emerging force before the COVID-19 pandemic, the mad rush and crowds on Black Friday were already diminishing. The significance and the make it or break it mentality around Black Friday is nowhere where it used to be back in the pre-digital commerce days. With the Great Acceleration brought on by the COVID-19 pandemic, Black Friday as we knew it will become nothing but a memory. Regardless of any CDC announcements, this shift has been in motion for quite a while.

With a longer holiday season and the added convenience of digital commerce, retailers and DTC brands have the flexibility of coming up with compelling pricing and promotional strategies to drive revenues over a longer period of time. In addition, we should not expect too many customers to be flocking to the malls due to the economic disruption, high unemployment rates, and diminished consumer confidence without a horizon because of the pandemic.

Gary Sankary
BrainTrust

This is the hot topic in my circles, what will Holiday 2020 look like? I expect we’ll see lots of creative marketing this year as retailers look for ways to drive business and avoid becoming hot spots for COVID-19 transmission. Remember most retailers put mask requirements and enhanced cleaning regimens in place before their local governments mandated them, too. I am very proud of how our industry (for the most part) has reacted to the challenges of the pandemic and worked to keep employees and customers safe.

Gene Detroyer
BrainTrust

COVID-19 certainly has accelerated trends. But negative trends in traffic have existed since online became a retail factor.

Let’s imagine for the 2020 holiday season you do all your shopping online. You do it early so there is no stress about getting the presents delivered on time. The gifts you buy are every bit as successful to the recipients as they were in the past. And if they are not, you just give them the instructions to mail them back and choose something else.

Holiday season 2021 comes. Why would you go back to the old way?

The downturn in retail traffic (crowds) that was predicted is at least five years ahead of trend.

Cathy Hotka
BrainTrust

Retailers are resourceful and have shown great flexibility. One of the questions to be answered is how customer habits will change; will people give fewer gifts? If families don’t get together, will splurges on food be irrelevant? I trust retailers to do the right thing, but their success isn’t guaranteed.

Mohamed Amer
BrainTrust

The CDC announcement is a non-event. As previously discussed here, many retailers are preparing for earlier holiday sales and maintaining a safe shopping environment. The wild cards include the timing, sites, and pace of a second COVID-19 wave, the severity of the flu season, and consumers’ frustrations with restrictions on their favorite seasonal activity: shopping for deals. Many will opt for ordering online, and let’s see if the delivery networks can handle the record number of deliveries this holiday season.

Ryan Grogman
BrainTrust

I wouldn’t underestimate the amount of people who won’t listen to common sense and will head out to crowded malls en masse to continue their annual tradition of holiday shopping in person. That being said, it’s a near certainty that stores won’t be as crowded as in years past, and that online shopping will be up dramatically as a percentage of holiday sales. And like other convenience and safety practices adopted during 2020, new entrants to the digital holiday shopping experience will likely see the benefit long-term and increase their percentage of clicks-vs-bricks shopping going forward.

Laura Davis-Taylor
BrainTrust

I’m on your bus Ryan, I think it remains to be seen. People are hard to predict and we’re all desperate for some sense of normality. For those that are proactively playing it safe, we’re getting used to taking responsibility for our own safety as we head out to stores. Which stores we go to, however, is the potential wild card. Will malls see less traffic, opting for more open and accessible stores? Will we see more local stores getting support? Or will folks flock to retailers with more trusted safety protocols? I do believe we will have less traffic, but culture code is a powerful lure–and nothing has more emotional pull than the holiday season. This is going to be interesting to watch.

Rich Kizer
BrainTrust

I have repeatedly said that the mood of the public, affected by the health threats we face every day, is like getting a birthday cake without the icing. They want to get out.

Customers will shop the stores, but I think that in the back of their minds will be thoughts and fears of threats to their health, which could shrink the average time in the store, thus affecting the size of sales. The approach will be to shop for specifics and get out of threatening environments.

Andrew Blatherwick
BrainTrust

The question is really more, can online retail manage the volumes over the holiday season if the same level of increase is experienced for online shopping as happened in the early days of the pandemic?

With retailers having to protect staff, not let them get too close to each other, limit the numbers in a warehouse at one time, etc., it is questionable how online retailers will be able to meet the volumes required to take up an additional 25 to 35 percent of sales during a holiday period. During last year’s holiday season, when increases were nothing like this year, many online retailers struggled to cope and that was without working restrictions in the warehouse. There is also the difficulty of physically distributing that volume of product in a short space of time. If the season is not significantly extended then there will be a lot of people celebrating Thanksgiving in December and Christmas in January.

Shep Hyken
BrainTrust

Americans (and others around the world) have become used to shopping online. Anyone that would have normally made it out on Black Friday – or any other crowded shopping time throughout the holiday season, such as weekday evenings and weekends – now knows how to shop online. They will adjust their traditional habits accordingly and make their usual purchases however they feel is most safe and convenient. As for future holiday seasons, if the world is safe and people are comfortable going back to malls, we’ll see a trend going back to brick-and-mortar, but it may not get back to 100 percent of what we’ve seen pre-COVID-19. Online shoppers will continue to shop online and that traditional in-store shoppers will buy both in-store and online. This would have happened anyway. COVID-19 just moved up the timeline.

Jasmine Glasheen
BrainTrust

There are people/consumers out there who are indignant. These people will not heed CDC recommendations of any sort. If given the chance, this demographic will visit any stores that are open over Black Friday to fight for deals and fight about wearing their masks.

Black Friday has always been chaotic. The responsibility falls on retailers to keep consumers and employees safe. I’d opt for online sales or curbside pickup during this tumultuous year.

Richard J. George, Ph.D.
BrainTrust

Online shopping is becoming a part of most consumers’ DNA. No doubt this season for in person shopping will be dramatically affected as noted by several respondents. However, the changed behavior will not be short lived. Online shopping is the new normal.