Ho, Ho, Hum: Struggling Retailers Brace for a Muted Holiday Season


As special as the holiday season feels to shoppers, it is crucial for stores. Holiday sales in November and December can bring in 20 percent of a retailer’s annual revenue, and 30 percent of sales for hobby, toy and game stores, while driving tremendous profitability, according to the National Retail Federation. The most recent annual report for Macy’s, which also owns Bloomingdale’s, showed that the fourth quarter accounted for 34 percent of its sales.

A pause is expected on so-called doorbuster deals and the ensuing madness created by crowds rushing into stores for limited discounts and fighting over electronics. Companies including Hasbro, Target and Macy’s have signaled plans to offer discounts over a longer period, starting as soon as late October. Jeff Gennette, Macy’s chief executive, said in a July earnings call that he expected Black Friday deals “to start in full force after Halloween.”

In preparation for customers who are nervous about crowds, Macy’s has been exploring new ways to manage store traffic and rethinking bustling sales events like Black Friday and the 10 days before Christmas, Mr. Gennette said. He added that this year’s new curbside pickup “is going to be a big secret weapon for us this holiday season,” and especially huge with shoppers who aren’t comfortable entering stores. Its performance will be crucial: Macy’s said today that sales for the first half of this year were $6.6 billion, compared with $11 billion last year.

“We’re not going to see any of these crazy blowout sales; we’re not going to see a typical Black Friday — we’ve already seen the cancellation of Thanksgiving Day shopping,” said Stacey Widlitz, president of SW Retail Advisors, an independent research firm. “The stores cannot safely handle these.”

Nordstrom has been preparing for more pressure on its e-commerce business this holiday season and “doing a lot of scenario planning about what it’s going to take to make sure that we can fulfill the demand if it’s going to happen disproportionately in online channels,” Peter Nordstrom, president and chief brand officer of the company, said in July.

“The wild card is going to be the traffic we get through physical stores, given the sensibility of customers around Covid,” he said. “And no one’s got a crystal ball on that.”



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *