Retailers have turned the sand hourglass for the holiday season with as much zeal as shoppers looking forward to eye-popping deals. No wonder, the season, which accounts for a sizeable chunk of yearly revenues, is a make or break for retailers. But this time around, retailers are bracing for a different holiday season, thanks to the coronavirus pandemic. To beat the COVID-19 blues, they are looking for an early start to the festive season with an extended promotional period to avoid rush at stores, given the health concerns.
Undeniably, the retail sector is still bearing the brunt of the coronavirus crisis that has brought about a major shift in consumers’ buying behavior and spending pattern. Items such as toilet paper, disinfectants, masks, gloves, packaged water, medicines and related food staples have been topping the shopping list for a while now, as people still prefer purchasing essentials and other household products before splurging on fashion and leisure items.
Without a doubt, there are fears about how comfortable consumers will be in terms of purchasing discretionary items at a time fraught with high unemployment and reduced disposable income. Well, if consumers choose to tighten purse strings, retailers have to tough it out this shopping season. However, industry experts believe that any measure undertaken by the government to stimulate demand or a breakthrough in COVID-19 vaccine may lift consumer sentiments, and in turn retailing activities.
In this respect, Daniel Bachman, Deloitte’s U.S. economic forecaster, said, “While high unemployment and economic anxiety will weigh on overall retail sales this holiday season, reduced spending on pandemic-sensitive services such as restaurants and travel may help bolster retail holiday sales somewhat.” According to a report from CNBC, Deloitte envisions holiday sales between $1.147 trillion and $1.152 trillion, which suggests an increase of 1-1.5% during the November-January period.
Meanwhile, e-commerce sales are estimated to improve 25-35% to reach $182-$196 billion, per the consultancy firm. The coronavirus pandemic and the resultant stay-at-home trends to maintain social distance have led to an accelerated shift to online shopping. This change in consumer behavior is here to stay, as working and dining at home have become the new normal. Meanwhile, retailers have been equipping themselves to capitalize on consumers’ increasing preference for a seamless shopping experience.
In keeping with this, product innovation, prudent pricing and digitization are the need of the hour. It comes as no surprise that companies have been stepping up omni-channel capabilities and adopting ways to enhance delivery and payment systems. To this end, companies’ same-day and last-mile delivery services, and buy online and pick-up-in-store facilities bode well. In fact, companies’ initiatives to expand delivery options and contactless payment solutions have been a boon amid the pandemic.
Retail bellwethers from Walmart (WMT - Free Report) to Target (TGT - Free Report) and from Best Buy (BBY - Free Report) to Costco (COST - Free Report) are sure trying all means to make the most of the upcoming season. Meanwhile, e-commerce behemoth Amazon (AMZN - Free Report) has unveiled plans to recruit as many as 100,000 full and part-time employees to meet the surge in online demand more efficiently.
The pandemic has certainly killed the euphoria surrounding the holiday season to some extent but there are hopes about recovery in demand across the board. With retailers ready to walk the extra mile to woo bargain hunters, let’s wait and see how things shape up.
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