Get ready to wade through crowds of shoppers on Black Friday, over Thanksgiving weekend and through the rest of the holiday season.
Retailers in Southern California and across the country say people are eager to flock to shopping centers, downtowns and small businesses in the coming six weeks. After spending last year in pandemic lockdown, they want to take in all the lights, deals and bustle of humanity that marks a traditional holiday shopping experience, analysts say. Plus, Santa is back at malls for in-person visits and photos.
Certainly, this season’s retail picture isn’t entirely rosy, with concerns about inflation, pandemic-related supply chain disruptions, labor shortages and a series of brazen group robberies in shopping and dining areas.
But in-store shopping, combined with robust online sales, could set a record $859 billion in sales, the National Retail Federation predicts.
“I think people want to be out. I think they really missed the store environment,” said Katherine Cullen, senior director of industry and consumer insights at the National Retail Federation.
“Think back to last year, when people were canceling Thanksgiving plans and moving things virtually,” Cullen continued. “There was a lot of fear and uncertainty. This year, people are gathering with family, reviving their traditions, and getting out and shopping is part of that for many consumers.”
Karen Strack, senior vice president of customer experience and brand marketing for Southern California’s Westfield malls, is seeing that first-hand.
“We did a pulse survey among shoppers, and 67% said they plan to spend more money and more time shopping than they did in 2019,” she said. “The three words they expressed most often were ‘joyful,’ ‘excited’ and ‘interested.’ “
Strack said more than 60% of the consumers Westfield surveyed also plan to dine out over the holiday season – a sure sign that they’re feeling more comfortable with being out in public, despite the delta variant.
But finding that must-have toy or another item you’re counting on? That might not be easy.
Lars Perner, an assistant professor of clinical marketing at the USC Marshall School of Business, said shoppers should brace for limited in-store inventories as a result of supply chain backups.
“There will be much less merchandise available,” he said. “A lot of shipments are still being held up, especially toys. There are lots of ships sitting in the water offer the ports of Los Angeles and Long Beach. And once they even get the stuff onshore it takes time to have it picked up.”
With bottlenecks in warehouses and a shortage of truckers to make deliveries, the movement of goods has slowed to a crawl, he said.
“When a trucker delivers goods somewhere and comes back for more they often can’t find a place to drop off the container they just used,” Perner said. “It’s a vicious cycle.”
Online shopping, which became routine for people during the pandemic, is also expected to be a big driver of sales, particularly on Black Friday and Cyber Monday, said Vivek Pandya, lead insights analyst for Adobe. But shipping delays for online purchases may drive people into stores, as they want to make sure they have their gifts in hand.
“On top of pent-up demand, there are many other reasons why in-store shopping is on everyone’s list this year: from longer expected shipping times to limited inventory due to global supply chain problems and manufacturing shortages,” said Tracy Dietlein, senior marketing manager for Broadway Plaza in Walnut Creek.
“People want to know that they can actually get the gifts they want,” she said. “That’s driving more people into brick-and-mortar stores.”
And when items are out of stock, an increasing number of retailers are offering gift cards as a backstop.
“If they have limited quantities of items they’re pushing the gift cards to bring shoppers back when the products they want are in stock,” Strack said.
This “pent-up” demand is likely to boost Black Friday’s reign as the busiest shopping day of 2021, according to an NRF survey. Last year, crowds at stores and malls were “light” and excitement was “muted,” retailers said. But this year, some two-thirds of the estimated 108 million people shopping on Friday, Nov. 26 — most big stores were expected to be closed on Thanksgiving Day — plan to do so in stores, the survey shows.
It’s not clear whether these expected crowds will be massive enough to replicate the frenzy of Black Fridays past, when shoppers lined up overnight for early morning door-busting deals.
Supply-chain concerns have prompted retailers to be especially strategic about when and how they offer specials, encouraging customers to shop early so stores can manage their inventory. Keeping merchandise in stock may prove to be more challenging for small businesses than large retailers.
Supply chain issues and labor shortages mean consumers should be ready to be flexible, analysts say. Kenneth Cochran, senior director in the consumer retail group at Alvarez & Marsal, a New York-based firm that studies retail trends, said he’s concerned about dwindling inventory in December.
“On a personal level, I started telling people a month ago, ‘Buy what you want for Christmas now because it might not be there at the beginning of December,’” he said. “That’s also going to be an issue for people who wait too long, who like to shop the day before Christmas. There will be stuff to buy in stores, but not necessarily the (electronic) items or toys that are hot this year.”
Similarly, Adobe’s Pandya said online shoppers shouldn’t wait too long for big discounts on popular gaming devices, games, toys and high-end smart devices. “We’re really recommending that people grab these products as soon as they can,” Pandya said. “In previous years, they might wait for a discount, but (the products) might not be available when the discounts become available.”
Jeff Badstubner, a managing director for JLL, a real estate management and investment firm, also wonders if staffing shortages at stores and restaurants will undermine people’s fun.
Retailers have been struggling to fill nearly 1 million positions, and Badstubner cited a report this week that Macy’s had asked corporate employees to volunteer for shifts in its department stores on Black Friday and other busy days. Macy’s has 76,000 positions to fill in its stores, as well as its call centers and warehouses, the Washington Post reported.
Badstubner said he recently went to a Starbucks and saw a sign that said it was closing at 2 p.m. due to staffing shortages.
“If you take that as a little microcosm and multiply that to everybody that’s in retail, that’s a bigger threat to the holidays,” Badstubner said. “The challenge is: If you or I go into a store this holiday season, and service is terrible — there’s nobody there to help us — and we’re frustrated by long lines, we might say, ‘Forget it, and go home and order online.’”
Staff writer Kevin Smith contributed to this article.
Source: Orange County Register