The usual stampede of shoppers clambering to grab discounted items was absent from stores this year due to COVID-19. Instead, consumers spent less and bought fewer items than in years past. In fact, the overall number of shoppers, both online and in-store, fell in 2020 to 186.4 million from 189.6 million in 2019, mainly because consumers have become warier of their spending during the pandemic.
Because of this, predictions about spending over the Thanksgiving holiday weekend fell short this year. Adobe Analytics, which had initially projected that online holiday shopping would reach $189 billion, was forced to lower its estimate to $184 billion after analyzing Thanksgiving weekend numbers. Adobe also predicted that Black Friday alone would bring in $10.3 billion in sales which instead only drove $9 billion. The National Retail Federation (NRF) reported that the average amount spent per consumer also fell, dropping from $362 in 2019 to $312 in 2020.
Increased consumer frugality was not the only factor in drooping retail sales this year; a marked drop in in-person shopping at physical stores accounted for a large part of the spending decline. Retail specialist Sensormatic Solutions reported that physical stores saw a 52% reduction in foot traffic this year, a trend that was only magnified by the absence of hordes of shoppers during Black Friday. Even the highly promoted deals and bargains so often sought out by consumers could not overcome the fear of contracting the virus in the packed in-store environment.
Additionally, recent years have seen many retailers beginning to open their stores early on Thanksgiving Day to edge out their Black Friday competition. This year, however, many retailers opted to stay closed on Thanksgiving Day which also accounted for the drop in foot traffic. The NRF reported that, as a result, the number of shoppers making purchases in-store on Thanksgiving Day fell by 55%. Quite understandably, in-person shoppers declined by 37% on Black Friday. Despite all of this, the NRF found that 70% of the holiday shoppers they surveyed felt safe shopping in stores because of the prioritization given to cleaning and safety. Those who did shop in physical stores witnessed a very different scene than normal: orderly lines, patrons using masks, and retail employees disinfecting anything and everything.
Luckily for the industry, online sales were not hampered by worries about COVID-19 and actually jumped 22% on Black Friday from last year. The NRF also found that “44% more consumers shopped only online this year compared with last year,” totaling 95.7 million. On top of that, the number of online shoppers surpassed 100 million on Black Friday for the first time. This surge in online shopping seems to have mainly benefitted large online retailers like Amazon, Walmart, and other big box retailers that offer one-stop shopping says the Wall Street Journal.
This holiday season, the option to buy online and pick up in store (or ‘BOPIS’) has increased dramatically among consumers. Adobe Analytics said that as shoppers attempt to circumvent large crowds and high shipping costs, they have increasingly turned to this option during the pandemic. In past years, consumers were 9% more likely to buy from a retailer that offered BOPIS, but this figure jumped to 30% at the start of the pandemic in March and April. BOPIS growth skyrocketed in April and May to over 120% and has now grown 146% during the holiday season. Because of this, Adobe is predicting that this growth will continue up to 40% during the holiday season, up 20% from last year.
The NRF is still forecasting that holiday sales will amount to around $755 billion, including growth from online shopping of about $202 billion. What accounts for the ‘holiday season’ now also seems to have shifted. Some shoppers started their holiday buying as early as October while 38% of those surveyed by the NRF said that they finished their shopping in the week before Thanksgiving.
While huge numbers of shoppers flocked online, year-long damage wrought by the pandemic continues to plague the retail industry. Consumers have spent less overall than they did a year ago and now expect increased convenience and safety options from their retailers. How the holiday season wraps up remains to be seen but these numbers are already making it difficult for retailers to predict what the industry will look like in 2021.
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