Black Friday lands on November 27 this year. At least this is the day after Thanksgiving, when Black Friday is traditionally celebrated. But many retailers, desperately trying to start Christmas sales as early as possible to limit their losses in a year hit by a pandemic, began selling on Black Friday as early as mid-October.
“This year brings additional variability due to the pull-forward effect,” said Sarah Wyeth of S&P in a research report. “When Amazon launched its Prime Day in mid-October, retailers such as Best Buy, Target and Walmart Inc. announced their own promotions,” said Sarah Wyeth. Many saw this as the starting signal for the Christmas business in 2020″.
While it’s unclear how many people started their Christmas shopping in October, as the number of people admitted to a store is likely to be limited to maintain social distance or avoid possible backlogs, this season is developing like no other year.
Coresight, a global research and consulting firm specializing in retail and technology, expects Black Friday pedestrian traffic in non-food stores to decline by about 50% this year compared to 2019 as the coronavirus pandemic accelerates the transition to online shopping.
Doorbuster sales and the thunderous herd of shoppers storming through the aisles on the Friday after Thanksgiving in search of this year’s hot items are likely to be a thing of the past.
“This year, there won’t be a blockbuster movie that boosts children’s toy sales or new toy systems,” Rod Sides, vice chairman and head of Deloitte’s retail and distribution practice in the U.S., told Washington Newsday.
“Spending has shifted from travel and entertainment to household items because more people will be at home during the vacations,” he said. “Demand for electronics is high, and there is a backlog of clothing. The sale of food and beverages – things you give away yourself – will stop.
Consumer spending accounts for about two thirds of the US economy. This year, the coronavirus has upset the forecasts for the Christmas shopping season. But the pandemic has introduced a new variable to the Christmas shopping season: Fear.
A nationwide survey of 4,012 shoppers by New York-based consulting firm Deloitte found that 51% are “anxious” about shopping in stores and 49% said they do not intend to resume pre-pandemic shopping patterns until a vaccine is developed.
As of November 10, there were 10,110,552 confirmed cases of corona virus in the U.S. and 238,251 deaths, reported Johns Hopkins University.
Pfizer and its partner BioNTech have developed a vaccine that they claim is more than 90% effective. If it proves to be safe, Pfizer hopes to make the vaccine available before the end of the month, but U.S. regulators have not reviewed the data. Further delays and uncertainties could delay distribution.
The efficacy rate of the vaccine is higher than expected. Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, said earlier that a vaccine that is 50% to 60% effective would be helpful.
However, it is uncertain how quickly the vaccine could be distributed and it is not clear how many people will be willing to take it. These factors further cloud the prospects for brick and mortar retailers.
It is expected that 64% of this year’s vacation budget will be spent online, partly due to fear of the coronavirus. Nearly two-thirds of those who planned to shop online said they wanted to avoid crowds and appreciate the convenience of shopping from home, according to Deloitte.
A total of 73% of shoppers said they planned to deliver items through established delivery services, while 27% planned to pick up items at the curb in stationary stores, more than double the number of the previous year.
Shoppers plan to reduce their spending by 7% this year to $1,387 per household. However, spending on celebrations at home is expected to increase by 12% to $435, while spending on travel and socializing outside the home is expected to decrease by 34% this year compared to 2019, Deloitte said.
Many analysts expect sales to stagnate or increase slightly. Both would be encouraging at a time that resembles a weak Christmas shopping season.