The 2021 holiday season appears to be blending some traditional shopping patterns with some mid-pandemic changes.
Consumers are expected to return en masse to traditional retail venues, spend more and make purchases earlier this year to avoid shipping delays. That has consequences for retailers. Black Friday — coined for the day when retailers shift from “red” to “black” and turn a profit for the year — appears to be a phenomenon of the past and now replaced by the “Thanksgiving Week” shopping period extending several days into Cyber Monday.
Those were some of the insights shared by Ricardo Belmar, Director, Partner Marketing and Senior Advisor for Retail & CPG for Microsoft, and Jon Levy, Vice President, Brand Management for Leap, during a webinar sponsored by Placer.ai. Several professionals that track retail activity in Maryland also predict a robust holiday shopping season.
Higher foot traffic
“The potential exists for the right amount of foot traffic, but the big question lurking is the eventual spend level, especially accounting for inflation,” stated Richardo Belmar of Microsoft.
“We are detecting significant excitement about the holiday season…and consumers generally have more money to spend and are ready to get out,” added Jon Levy of Leap. “Savings accounts are larger because the general public generally didn’t travel in the past year or have larger purchases such as a wedding.”
Retail sales occurring over the holiday shopping season are expected to increase up to 10%, according to data released by The National Retail Federation, with individual consumer spending projected to rise by an average of $1,463. Clothing, electronics and gift cards are expected to be the most popular items purchased.
“Digital shopping is obviously here to say, but consumers are anxious to leave their homes and in-store shopping will regain some ground that was lost last year,” stated Cailey Locklair, President of the Maryland Retailers Association. “As concerns with the pandemic ease, the seven-year low we experienced last season is expected to reverse. We continue to encourage the support of local stores given their positive impact on our communities, jobs and tax revenue.”
Retail brands need excitement
“The holiday shopping season has become quite boring over the past several years, with most retailers touting the same ‘door-busters’ or ‘30% off the entire store‘ promotion and excitement is sorely needed,” Levy said. “Brands win or lose based on how they execute and everyone is anticipating a bit more creativity to lure shoppers – whether that is online or into traditional stores. Consumers generally don’t have any shopping urgency because they believe Black Friday sales will extend well into December. They realize that they can purchase items online at any time and access the same deals.”
R.I.P. Black Friday
“Black Friday has been chipped away for several years and we can probably declare it officially dead as that one day is no longer critical to achieve a successful holiday season,” stated Belmar. “It now makes sense for retailers to spread promotions and sales out for several weeks to encourage a consistent shopping period. Retailers and malls, interested in creating separation from others, need to curate the shopping experience by promoting local products that offer unique gifts and creating an environment that consumers find personal.”
Consumers shopping earlier
“The media has done an excellent job of communicating the product shortages expected for the holiday season, so we believe consumers will be making purchases earlier,” added Belmar.
“Supply chain issues are at odds with the tremendous momentum of the economy and the steep headwinds presented by this issue is raining on the parade of a successful shopping season,” said Levy.
Stores in the wrong locations
“Malls are a dirty word right now but that is patently unfair because not all malls are alike and I generally categorize malls into three separate buckets,” Levy added. “Leading the charge are the premier powerhouse venues that consistently draw traffic from tourists and locals. This is followed by emerging lifestyle centers that, like the first category, continue to perform exceptionally well. The third bucket that is grabbing all the headlines these days are the older, Class B malls with food courts and legacy tenants that clearly need a makeover.
“When people ask me if the United States is over-stored, I reply no – they are just in the wrong locations,” Belmar said. “Consumers are not thinking about an omnichannel experience but it is critical for retailers to deliver this. Shoppers want to be able to shop at any moment – be it at a traditional retail venue, at their desktop or using their device. Retailers need to make each of these options easy and seamless for consumers.”
“Towson Town Center and Columbia Mall are powerhouse projects in the greater Baltimore region – mainly because they have Nordstrom as an anchor – and it is everyone else after that,” stated Tom Maddux, Principal for KLNB Retail. “Many, many malls are struggling including Security Square and Marley Station, and others are drifting with no discernible direction or strategy. The common element is that all have great real estate and infrastructure, and those are the primary elements necessary to build value and move in a new direction. It will take time to figure out the best course of action for each project and this will occur on a case-by-case basis. As always, grocer-anchored shopping centers will thrive and the best retailers will gravitate to prime locations if the opportunity to upgrade presents itself.”