Executives in the $3.9 trillion retail industry are facing their toughest call yet in an unprecedented year of hard decisions: What should they do inside their physical stores on Black Friday, amid a deadly pandemic that’s still likely to be raging?
Walmart Inc., Target Corp. and other big chains have already said they will close stores on Thursday, Nov. 26, for Thanksgiving Day -- a move long advocated by employees. But whatever happens the following morning needs to feed the frenzy of American consumers hungry for a bargain, even if Black Friday no longer marks the start of the holiday shopping season.
“It’s a real dilemma,” said Neil Saunders, managing director of GlobalData Retail. “Black Friday has traditionally been about getting as many people into the store as you possibly can. Now they have to restrict numbers. So retailers will look to do a combination of things.”
Options under discussion include limiting opening hours on Black Friday to help control crowds, especially in the wee hours when lines usually form. Adding security to enforce social distancing, mask-wearing and one-way aisles could also work. Given that many shoppers want a contactless experience, it’s also critical to enhance curbside pickup. And retailers could bring some products off the shelves and set up temporary displays under tents in their parking lots.
While all retailers are likely to push shoppers online early and often, doing so carries extra costs to fulfill orders, and web-only exclusives risk angering customers who still prefer to shop in brick-and-mortar boxes. Target has already said it will offer 20,000 additional items on its website this year; Walmart takes pains not to treat different pools of customers differently.
Online Push
Last year 14% of the $1 trillion in holiday spending went online, according to researcher eMarketer, up from 10% in 2016. Holiday deals start to appear online just as Halloween costumes are being put away. Even on Black Friday, more shoppers went to the web last year than visited stores, according to a survey from the National Retail Federation.
E-commerce costs will soar this holiday due to supply-chain bottlenecks. Couriers FedEx Corp. and United Parcel Service Inc. both hiked delivery prices recently after lockdown-fueled demand exceeded the traditional holiday rush.
“It is clear that the fourth quarter is going to be monumental for e-commerce, but it is also clear that there is no infrastructure to support it,” said Juozas Kaziukenas, founder of researcher Marketplace Pulse.
Store Pickups
To avoid the soaring costs of home delivery, Walmart and others will likely encourage shoppers to buy online and pick up those items at the store well before Black Friday. There’s extra urgency this year because Amazon.com Inc. had to postpone its usual mid-summer Prime Day sales event to autumn.
Target, Walmart and other retailers have rapidly expanded so-called curbside options in recent years, and Best Buy offered contactless pickup when its stores were closed in late March due to lockdowns. But there’s no curb big enough to handle the crush of gift orders around Thanksgiving, so retailers will have to use their mobile apps to space out those pickups.