Black Friday plus COVID creates period of crisis for retail
The data shows that businesses have reason to be concerned. More than half of U.S. shoppers said they wouldn’t buy from a store if they weren’t happy with the delivery experience, according to a September survey from Accenture. Online sales are expected to climb 33% to $ 189 billion, testing the limits of distribution networks in the United States, according to Adobe Analytics.
Fitch’s Silverman said he was concerned that the new programs adopted by retailers might not be specific enough for them to accurately report inventory and limit delays and problems, which could potentially impact sales. .
What’s more, spending habits change dramatically during the pandemic, and many industry observers say the move towards e-commerce and social distance shopping methods could be permanent. So if buyers don’t have a good experience, retailers risk losing them for good.
Department stores, in particular, want to keep shoppers happy. It is one of the worst performing sectors in retail, and Macy’s Inc. and Kohl’s – both of which are posting profits this week – have lost more than $ 7 billion in market value this year. Deemed non-essential at the start of the pandemic, department stores and clothing chains were closed for an extended period, wiping out millions in sales as unsold merchandise piled up in stores and warehouses.
Big box stores Walmart Inc. and Target Corp., which benefited from the pantry loading this year, are also releasing their quarterly results this week. The latest round of disclosures are expected to shed light on how retailers are handling shipments and increased demand in the final weeks of 2020.
Businesses need to be prepared for a flood of shoppers picking up orders, both inside stores and outside in the parking lot. Adobe Analytics analysts expect pickup lines to grow longer as Christmas approaches and use of pickup options to increase 40% from last year, surpassing shipping standard mail as the most popular purchase option.
At the same time, higher levels of e-commerce will put a strain on traditional carriers like FedEx Corp. and United Parcel Service Inc., which retailers believe may limit stores’ shipping capacity as orders increase.
Roadie, a participatory last-mile delivery platform that works with companies like Walmart, Home Depot Inc. and Tractor Supply Co., has received more and more calls from retailers asking for help filling orders. the same day. It is now operating with 5,000 additional stores, up more than 250% since the start of the pandemic.
“You will see a big blockage in the system once you get past Thanksgiving,” CEO Marc Gorlin said. “The onus is on the retailers.”