What will be the role of stores during the holiday season in the US? Especially at a time when online shopping is booming.
“We expect the recent boom in US e-commerce to be followed by a very strong holiday season for online retailing. In the second quarter, US online retail sales climbed by 47%, in exceptional circumstances that included the lockdown period. In the fourth quarter, we expect the pace of growth to moderate but remain at elevated levels. In this context, the question is what role will brick-and-mortar stores play this holiday season,” opined Deborah Weinswig, CEO & founder, Coresight Research.
For obvious reasons, retailers are not seeking the traditional store traffic associated with Black Friday. Big retailers are announcing that they will be closed on Thanksgiving or are stretching promotional campaigns over an extended period to take the emphasis off Black Friday. However, this does not mean that brick-and-mortar stores will be redundant this holiday season. “In a ‘mask economy’, physical stores will shift from the increasing focus on the quality of experiences that we saw pre-crisis, to a more functional focus on consumers simply getting hold of products conveniently and safely,” Weinswig observes.
Role of brick-and-mortar in fulfilment
According to Coresight Research, fulfilment will be a major role for many stores this season. As retailers have reported second-quarter earnings, several have pointed to very high rates of collection of online orders. In some cases, at Home Depot, for instance, pick-up reached as high as 60+%.
In addition to in-store pick-up, retailers will call on ship-from-store capabilities to serve online demand. In the second quarter, Target reported that store-enabled digital fulfilment options – which included ship-from-store, in-store pickup and curbside pickup – accounted for 90% of its total e-commerce orders. In addition, same-day services that were fulfilled from stores, including rapid delivery and collection, contributed a full six percentage points of the company’s 24% comparable sales growth.
Retailers to reshape omnichannel operations
“We expect retailers to continue to reshape their omnichannel operations. Best Buy is designating around 250 of its approximately 1,000 stores to handle a higher volume of packages, to speed up order fulfilment and improve efficiency for the holiday season and beyond,” Weinswig stated.
Retailers must stand prepared for fluctuations in how consumers expect online orders to be fulfilled: In a new survey, Coresight Research found that a greater number of consumers expect to increase their use of delivery services for online orders in the remainder of 2020 than those that expect to increase their use of collection services. In effect, there could be a relative easing of pick-up within the online shopping mix during the holiday season.
The long-term view
The role of stores during the holiday season in 2020 is likely to be fulfilment oriented. “Beyond holiday 2020, we expect retailers to continue to review their store estates in the context of a likely sustained uplift in e-commerce,” Weinswig said. “Retailers must look at the whole value of a store – in terms of brand building, product discovery, comparison and research and transaction and fulfilment.”
“However, we are still likely to see further store closures as a consequence of these channel shifts. We expect that a number of multichannel retailers will have been surprised by the extent of online sales retention during periods of store closures. For some retailers, this will have been the only hard evidence of possible sales-retention rates without stores (albeit in exceptional circumstances). Along with consumer shopping patterns in the coming holiday season, these numbers are likely to feed into decisions on their future brick-and-mortar presence. Retailers will be looking at the extent to which these channel shifts are sustained post lockdown – and so we could see more store closure announcements into 2021 in response,” she concluded.
Words by Farimah Moeini, Snapchat Head of Industry – Retail and Travel TheJuly 5, 2021 | By RetailME Bureau
Snapchat has been betting big on Augmented Reality’s (AR) retail future consideringJune 22, 2021 | By Jibran Chouguley
Union Coop, a consumer cooperative in the UAE, revealed that 78% of
Union Coop has opened its 23rd branch within the UAE in Jumeirah
Nando’s has revealed their revamped Sheikh Zayed Road outlet where newcomers and
UAE-based Al Maya Group announced that it will be boosting import of
UAE-based grocery retail chain, Grandiose has opened its first hypermarket in Abu
UAE-based Carrefour announced its theme and plans for Ramadan 2021. The brand
Locally owned supermarket Spinneys celebrates 60 years of doing business in the
UAE-based Carrefour will become the first retailer in the region to offer new levels
The Organic Farmers’ Market is back in Bay Avenue for its 12th
UAE-based Lulu Group recently inaugurated its first-ever all-female staff store in Jeddah,
Jones the Grocer, the gourmet grocer and cheese retailer launches the Jones
JD Sports Fashion has announced the appointment of Bert Hoyt as its
Online retail giant, Amazon has announced plans to open department stores in
adidas has announced that it will sell Reebok to Authentic Brands Group
The Ministry of Human Resources and Social Development in Saudi Arabia has
E-commerce giant Amazon’s founder Jeff Bezos has stepped down as CEO, handing
Words by Farimah Moeini, Snapchat Head of Industry – Retail and Travel The
American clothing retailer, PVH has increased the number of active job advertisements
Extravagant, conceptual, great food and views are some of the ways that
Snapchat has been betting big on Augmented Reality’s (AR) retail future considering
As the UK begins to return to normality, Father’s Day shoppers are
Abu Dhabi’s state investment company ADQ is in talks to invest about $500 million