It’s funny to think about Christmas in the heat of summer, but don’t be fooled, the elves are already busy prepping their warehouses for the holiday season. Like most everything in 2020, consumer trends are still unpredictable. Covid19 continues to send ripples and curve-balls through retail and online trends. Despite so many unknown variables, planning ahead is always a good plan. Today marks 167 sleeps til Christmas.
The holiday shopping season usually starts right after Halloween and runs right up to Christmas Eve – and these two months represents more than half of the annual revenue for many retail businesses. As more retail options start to re-open, let’s consider some Covid19 scenarios and how to best protect our businesses from negative impacts.
Worst case scenario: What if consumer trepidation around spending results in low sales this season? Let’s face it, many people are feeling the economic impact, while others are simply feeling cautious in these unsure times. Opening up stores, restaurants, bars and sports could trigger a resurgence of Covid-19 cases this fall. A second wave health crisis will make people re-evaluate their approach to the holidays. A focus on life’s core things: health, family, food and nesting at home could dominate people’s Christmas wish lists. This could have a massive impact on the sort of inventory that will move between now and Christmas.
In addition, many workers’ jobs are still in limbo, so large demographics may be feeling too prudent to spend much money in these uncertain times. That said, online sales have continued to surge since March because shoppers continue to avoid brick-and-mortar stores. Delivery will continue to be a challenge with a reduced delivery workforce in place. Consider and research alternative distribution options now. Can online vendors incentivize early bird specials? Does your OMS (Order Management System) and CMS (Channel Management System) allow you to optimize your shipping? Streamlining your channels is critical to keep your inventory moving.
The sluggish scenario: During May, total U.S. retail sales were around $485 billion which is down 6.1% from last year. However, U.S. retail sales were up significantly month-over-month in May 2020 – thus, the boost in sales may not indicate a particularly speedy recovery.
Currently, U.S. supplemental unemployment benefits are boosting recipients’ checks by $600), but these are scheduled to end in July 2020. If unemployed and furloughed workers suddenly find their incomes in jeopardy, they could significantly cut spending, slowing any economic recovery. Will consumers be open to financing options for the holidays? Can you promote layaway programs, early-bird incentives, Paypal or other financing services?
The recovery scenario: Stop the presses! The good news is that June 2020 just saw a 17.7% rise in retail sales compared to April. This is the single largest month-to-month increase in U.S. retail sales since the 1990s. More news that has us feeling optimistic is that the U.S. Labor board reported unemployment applications fell by almost 60,000 people last month. The timing of this positive momentum is excellent and bodes well for the upcoming Christmas shopping season. Covid has impacted everyone, but it’s human nature that people will want to celebrate their holidays and aim to restore some semblance of normalcy to their lives. How can we help consumers to do that? Remind them early and often that they have lots of options to embrace Christmas.
Offer early-bird incentives and educate your customers about the new 2020 shipping deadlines. Explore new sales channels or social media to promote your products/ services? Take some time to identify potential inventory problems. Can moving some inventory to local fulfillment centers ease your shipping challenges? Covid19 may be with us for a very long time, so pay attention to your 2020 data – it can show you which way the wind is blowing.
For in-store shopping consider offering curb-side pick-up or free masks for concerned consumers. Talk to your core consumers – ask them what they want – and need. Test the waters and start the dialogue early. Cultivate ways that your business stand out in a positive way – in these volatile times consumers are keenly responsive to solutions that make their lives a little bit easier.