The Register Citizen (Torrington, CT)
Retailers expect a lean Black Friday this year
Anticipating smaller crowds, some retailers starting sales early
For retailers in Connecticut and around the nation, the resurgence of COVID-19 couldn’t possibly come at a worse time.
Black Friday — the day after Thanksgiving that usually entails a mad rush to stores nationwide — typically is the official start of the shopping season and is less than two weeks away.
But any sense of celebrating the holiday season has been snuffed out this year by some pretty grim predictions.
The Institute for Health Metrics and Evaluation at the University of Washington is forecasting that the COVID-19 death toll in the United States likely will more than double by the end of the year to more than 410,000, with a worst-case scenario of more than 620,000 people being killed by the virus.
Faced with those projections, retail experts are projecting widespread changes in holiday shopping — in how people do it, how much
they spend doing it and how their purchases will get to their intended recipient.
The expectation for the 2020 holiday season is that shoppers will spend less overall, but more of it online, and that they will be more focused when they do venture out to malls and shopping centers.
Ken Sterba, general manager of the Connecticut Post Mall in Milford, said the latest spikes in COVID-19 cases already have had an impact on business at the mall.
“We’re already seeing a little bit fewer people, week to week,” Sterba said. “And we’re obviously not expecting anywhere near the crowd for Black Friday this year that we have seen in previous years.”
The Connecticut Post Mall “lost a handful of tenants” over the summer, he said, but most stores in the mall “have figured out a way to make it work.”
“There’s so many smart people in this industry,” he said. “The stores, the brands that are the most agile, those are the ones that are thriving.”
Retailers that sell apparel for teenagers as well as athletic clothing and leisure wear “are doing quite well” at the Post Mall, Sterba said. And two restaurants in the mall, Buffalo Wild Wings and Chipotle, have been successful because they offer delivery, he said.
The National Retail Federation is predicting the average shopper plans to spend $997.79 this season on gifts, food and holiday items such as decorations, as well as additional “non-gift” purchases for themselves and their families. That’s $50 less than the $1,047.83 they had said they planned to spend on these categories last year.
Brian Marks, senior lecturer in the economics and business analytics department at the University of New Haven’s Pompea College of Business, said COVID-19 “has transformed a number of practices and customs and has accelerated the transformation of many enterprises.”
“It has pushed to forefront numerous weakness in our business models,” Marks said.
Some of the changes already were underway before the pandemic, according to Kate Ferrara, who runs the annual holiday survey for Deloitte, a financial advising firm.
“Shoppers are becoming less reliant on Black Friday than they used to be,” Ferrara. “A lot of retailers make heavy use of promotions throughout the entire season.”
Venturing Out
Black Friday traditionally has been regarded as being solely about “in-store, on-ground sales,” according to Marks, while the Monday after Thanksgiving became Cyber Monday and was focused on online sales.
“Given the likelihood that less people are going to shop, retailers are going to say we don’t need as many people working in the store,” Marks said. He predicted a likely 30 percent decline in shopping at stores, he said.
But that doesn’t mean Black Friday is finished, Ferrara said.
“People are still planning to shop then,” she said. “But I do think we’re going to see a continued shift to online.”
Burt Flickinger, managing director of Strategic Resource Group, said online purchases could account for anywhere from 40 to 60 percent of all retail sales this holiday season. Nearly three out of every four consumers said in a recent survey that they still are concerned about going to retail centers and may scale back what few trips they do take as a result of the recent surge of the virus, he said.
“Consumers are understandably nervous of being out in public,” Flickinger said.
Connecticut consumers who responded to social media inquiries from Hearst Connecticut Media about plans for Black Friday were emphatic that they won’t be taking part in the annual retail ritual this year.
“Absolutely not,” said Matt McCullough of North Haven. “I have confidence in myself to be safe, but almost no confidence in the people who I see daily who are not wearing masks and distancing.”
Wallingford resident Stan Capp said the ability to order merchandise online and have it delivered to his home makes shopping in-person unnecessary.
“Normally not a big fan of shopping on these days to begin with,” Capp wrote. “With the numbers of Covid spiking I don’t feel there is a need to be out in public. What bothers me is the smaller stores that are hurting since March; they don’t have the advantage of putting out a tent like the restaurants and keep losing money.”
Money Matters
Fear of catching COVID-19 isn’t the only reason for consumers to reconsider their holiday shopping habits, Marks said.
“There is the uncertainty over a relief package and the unemployment situation,” he said. “Some people are going to be less generous. In times of uncertainty, people are less likely to spend.”
To prime the pump of online sales, he said many retailers are advertising in a series of waves.
“Some started offering sales the day after Halloween,” Flickinger said. “Then they made another big advertising push the day after the election and again on Veterans Day. They are really moving what was essentially a 30-hour window of time to a rolling, 30-day sale.”
David Cadden, a professor emeritus at Quinnipiac University’s School of Business, said he doesn’t expect retailers to skimp on the deep discounts they traditionally offer customers during the holiday season, even though many may have seen profits decline since the arrival of COVID-19.
“I don’t see them as having any choice,” Cadden said. “If you don’t offer them and you don’t have the sales, you’re not going to be alive.”
But Marks said he’s not convinced that deep discounts will be as plentiful this holiday season.
“Why do we have discounting? It’s to manage inventory.” Marks said. “If retailers are reluctant to buy goods because they fear they will be unable to sell them, they are less likely to offer deep discounts. There may be a difficulty in trying to heavily discount all over the place.”
Cadden said he expects retailers still will see some sales growth this holiday season, albeit less than in previous years.
“The question is how much?” Cadden said. “I don’t think we’ll see the double-digit sales growth of seasons past. And that will make this a critical season in terms of determining whether some malls survive.”
The Extra Mile
With social distancing requirements in place across the nation, malls and individual retailers will be limiting the number of people who can shop at one time. And at least two major retail players, Chicago-based mall operator Brookfield Properties and Target, have come up with a unique idea to help manage the social distancing of shoppers: Reserve a time when you can shop.