It’s not going to be a normal holiday retail season—the ongoing spread of COVID-19 will ensure that. But that doesn’t mean the 2020 holidays will be devastating for retailers. It may even be, well, decent.
September’s retail sales, which showed that overall retail spending was up a modest 1.9% from August, proved how resilient American retail can be—and underscores how dedicated U.S. consumers have been to retail therapy, albeit in certain categories more than others, during the pandemic. And, it should be said, no retail economist we know of expects retail sales to crater in November and December. In fact, some think retailers may come out on top.
Here are some educated predictions for how holiday retail will go:
Online Shopping Will Continue to Boom
As many consumers continue to shy away from brick-and-mortar shopping during the pandemic, it’s expected that online sales will play a major role in 2020’s holiday shopping hauls.
Deloitte, in its Holiday Retail Survey, found that nearly 51% of holiday shoppers “feel anxious about shopping in-store.” And the National Retail Federation (NRF) reported that 60% of consumers intend to purchase holiday items online this year, while another 44% plan to use quick-pickup services such as buy online, pickup in-store. Additionally, 16% of consumers plan to use same-day delivery, the report found.
The Holiday Shopping Season Will Start Earlier
For the first time ever, consulting firm AlixPartners added the month of October to its predictions for holiday spending. “The traditional November-December holiday season definition is meaningless this year and, I would argue, for the future as well,” said Joel Bines, who co-heads AlixPartner’s retail practice, in a company statement. “For years now, holiday sales have been pulled forward earlier and earlier, thanks mostly to the explosion in online shopping.” The pandemic, he argued, is accelerating that trend. The company’s report said that 49% of consumers will start holiday shopping by Halloween, or even earlier.
Consumers Will Buy Less for Themselves
Shoppers who typically “treat” themselves with self-purchased items may be doing away with that practice this holiday. “Consumers are focusing on making the holidays special for others but are playing it by ear when it comes to those ‘extra’ items they might get for themselves,” said Phil Rist, executive vice president of strategy for Prosper Insights & Analytics, in a recent NRF report.
Shoppers Will Wait for Sales
With millions of Americans out of work, and a significant portion of the country waiting on a second stimulus package to pass the Senate (which may or may not happen), it’s unsurprising that Deloitte found that roughly 45% of consumers will wait for holiday sales to buy big-ticket items—and that “getting a great deal” is the top priority when choosing a retailer to shop from.
Households Will Spend Less, But the Pullback Won’t Be Uniform
Across the board, consumers say they plan to spend less on gifts this year, according to Deloitte’s findings. But lower-income households plan to rein in spending the most (again, no surprise there). Households that make less than $50,000 say they will spend 42% less at retail this year, while middle income ($50,000–$99,000 year) and higher income ($100,000 or more) households say they will spend 36% and 35% less this year, respectively.
Photo by Emili Vesilind
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