Could there be an October surprise for US retail?
During a normal year, October isn’t a holiday shopping season. But this October could be different, feels Coresight Research.
Target made the first move when the company announced that it would offer its lowest prices of the year from October, thereby encouraging shoppers to start their holiday shopping next month. The retailer also emphasised that customers would enjoy greater safety by shopping early and avoiding the crowds.
In its announcement, Target confirmed that its stores would be closed on Thanksgiving Day, November 26, 2020, to give its employees and customers a break, curtailing the trend of Thanksgiving Day shopping. Since then, other retailers have followed suit, including Bed Bath & Beyond, Dick’s Sporting Goods, Foot Locker, Ulta Beauty, Under Armour and Walmart.
Although stores have previously increasingly opened on Thanksgiving to offer an early start for holiday shopping, many things are different this year. It is possible that shoppers will indeed seek to avoid the crowds for safety reasons. As such, it is unlikely that retailers will offer in-store doorbuster deals, although they may do so online. As retailers largely had to make their holiday plans during the peak of coronavirus-related lockdowns in the US, it is also possible that they anticipated a weak shopping season and placed light orders for the holidays, limiting the quantity of inventory.
Customers are also likely to see the benefits of a spread-out holiday shopping season, as it will give them more time to organise purchases if they wish to avoid busy shopping spaces. In the most recent Coresight Research weekly consumer survey, more than 55% of US consumers reported that they are avoiding shopping centres and malls, although this percentage has declined over the past several weeks. More than 40% of respondents said they are avoiding shops in general, though this trend is also slowly receding.
Consumers concerned about safety will likely order more goods online or choose delivery methods such as curbside pickup or BOPIS (buy online, pick up in-store) to avoid entering stores. A rush of online orders could overwhelm shippers and lead to extended delivery times – another reason for consumers to shop early. Shippers are already levying holiday shipping surcharges.
Elaborating on why there could be An October surprise for US retail, Coresight Research also indicates that Amazon also appears to be targeting a shopping surge in October as well. Although the company has not officially announced dates for Amazon Prime Day this year, the event is reportedly planned for early October. Last year’s US Prime Day ran for two days, reflecting the trend of ever-longer shopping events. In addition, Amazon’s Black Friday sales are expected to begin on October 26 and run for three weeks.
For many reasons, this holiday season will be very different, Coresight Research cautions. Consumers will have fewer retailers to choose from, due to many store closures and liquidations following bankruptcy filings. Inventory availability may be light, prompting consumers to seek alternate ways of gifting, such as preowned items, e-gifting or gift cards. Finally, consumers may be reluctant to enter stores so may order more online or prioritise curbside delivery options. With so many variables this holiday season, consumers are being advised to start shopping early to ensure that they receive the goods they want in time for the holidays.