Here’s How Retailers Can Win the Holidays

The pandemic has forced retailers to improvise since spring, and the holiday shopping season will bring more such creativity, including pop-up stores, earlier discounts and even socially-distanced festive events.

That’s according to a new report from CBRE — a report that was released just as Walmart announced its own new festivity plans for autumn to attract shoppers in a safe manner, and as retailers prepare to launch their own early Black Friday deals amid a push for earlier holiday shopping.

Topping the list of fundamental holiday shopping trends for 2020 are an explosion in e-commerce sales; an early start to a longer shopping season to reduce crowds; greater use of curbside pickup; and enhanced safety protocols at physical locations, according to CBRE.

“Retail hasn’t grappled with anything like the challenges it faces this year, and the holiday retail season will be affected as retailers adjust to changing shopping behaviors,” said John Morris, CBRE’s retail leader. “We will see modest growth this holiday season, as brick-and-mortar sales will be challenged and overall consumer confidence is tepid. However, e-commerce sales will hit new highs in 2020."

Among the report’s main findings:

• Overall holiday retail sales are expected to grow less than 2% year-over year, a slower rate than previous years. Holiday retail sales have averaged 4.1% growth per year since 2010. Meanwhile, CBRE foresees e-commerce sales surging at a record growth rate of more than 40% in November and December. This is up from the previous holiday growth record of 14% set in 2019.
• With this growth in e-commerce sales, one of the biggest shifts for both retailers and consumers in 2020 will be rising carrier surcharges and escalating delivery costs during peak season. If consumers procrastinate in their holiday shopping, they likely will face a surge in shipping prices and delayed delivery in the final rush, in addition to limited inventory availability.
• Retailers are revamping their store formats and procedures to make customers feel comfortable and safe returning to in-person shopping. (Indeed, news recently emerge that Staples will host contactless returns services.) Expect retailers to maximize the use of “in-and-out” shopping: A new strategy that allows consumers to examine merchandise and talk with sales associates in the store, while pushing all other activities - such as payment, gift-card purchases, wrapping and returns – out of the store into common areas and outdoor space where weather permits. 
• Pop-up store activity will increase to expand retailers’ reach and support social distancing. Curbside pick-up and “buy-online-pickup-in-store,” or BOPIS, which has increased by more than 500% during the pandemic, will continue to attract customers who want to minimize their time spent in the store. 
• Retailers intend to start offering holiday promotions much earlier than Black Friday weekend, with the aim of de-emphasizing single-day, doorbuster events that traditionally draw big crowds. For some, that will mean rolling out the deals before Halloween and then continually unveiling new promotions throughout the season. To that end, many shopping center owners and retailers have opted to close on Thanksgiving Day – reversing a recent trend of offering doorbuster specials on the holiday – to further downplay programs that typically generate crowds.
• Holiday events are being transformed in stores and malls across the U.S. to provide consumer comfort, safety and a festive atmosphere. Retailers are using contactless engagement and sales, one-way aisles and virtual waitlists to manage in-store traffic. Malls are deploying security to enforce social distancing and mask-wearing while providing stylized safety communications and sanitization stations throughout the properties.

“Retailers are becoming more creative in how they manage their physical locations and will continue to develop ways to support their growing e-commerce business,” said Meghann Martindale, CBRE’s global head of retail esearch. “This holiday season will be a significant test for new omnichannel strategies and practices that will help define how retail will operate moving forward.”