Prof: Pandemic will lead to Black Friday shift
MUNCIE, Ind. (Inside INdiana Business) — The COVID-19 pandemic is changing the way retailers are preparing for what is usually the biggest shopping weekend of the year. Many stores, including the nation’s largest retailer Walmart, have already announced plans to close on Thanksgiving Day, and others are planning to have their Black Friday deals available online well ahead of the big day. Steve Horwitz, professor of free enterprise at Ball State University, says the changes could last well beyond the pandemic.
In an interview with Inside INdiana Business, Horwitz said retailers are facing a major problem heading into the holiday season.
“There’s just no way they can accommodate the typical kinds of crowds and crowding that we associate with Black Friday, so they have to figure out way to spin it out,” said Horwitz. “And I also think we’ll see the other innovations that we’ve been seeing already during COVID: lots of curbside delivery, lots of building up websites and building up online delivery and online ordering. So, all of the things that we’ve seen so far, I think, are going to become features of Black Friday and I think that means that Black Friday as we know it, at least this year, will be dead.”
In addition to Walmart, retailers such as Target and Best Buy have already begun offering Black Friday deals, largely in response to Amazon moving its Prime Day to October.
Horwitz says that kind of move is a direct response to the pandemic.
“In essence, what they’re going to do is socially distance their customers by stretching them out through time and say, ‘Let’s make those deals available for a longer period of time,’ so there’s no one point in one day that everyone’s trying to crowd in and get these things done,” said Horwitz.
Additionally, Horwitz says many families may be getting together for the first time in months to celebrate Thanksgiving, which could also have an impact on future Black Fridays.
“They might well appreciate having a Friday where they don’t have to run out to the store and get in line and just hang out with each other. They may well say, ‘Look, I don’t want to go out and into crowded stores if the bargains aren’t worth it. I’d rather spend this time that we haven’t had this last few months.”
In an interview last month with Inside INdiana Business, Fort Wayne-based Sweetwater Sound Inc. founder and Chief Executive Officer Chuck Surack said while sales for his company have soared during the pandemic, predicting the fourth quarter is “one of the hardest things I’ve ever done in my 42 years of professional life.”
“Normally, in our last quarter of the year, we’re up quite a bit. It’s a very popular time of the year to buy presents for friends and family, but also sometimes for yourself,” said Surack. “On the other hand, we’ve had such tremendous growth all year long, I don’t know if we’ll get that additional bump towards the end of the year. It’s a little hard for me to understand because you think about the unemployment numbers, you think about all the layoffs that we’ve seen, and all the professional musicians that are not working, it’s hard for me to rationalize why we’re going to get a growth.”
Rob Wallstrom, CEO of Fort Wayne-based Vera Bradley Inc., says the holiday season is going to be very different this year.
“I think it’s also going to be interesting for customers because a lot of retailers, when they started going through COVID, reduced their inventory purchases for the back half of the year,” said Wallstrom. “So I think another reason for customers to get out early his supply is going to be much less than what’s normal. So if you really want what you want, getting out early is going to be important.”
Horwitz says while the state of COVID may change heading into the holidays and states may implement different restrictions, he expects things to be similar heading into Christmas Eve, the second busiest shopping day of the year.
“You don’t want to have people show up at your store and there’s a mile-long line to get in because you have capacity controls, so how do we deal with that? And again, I think that means offering more online options, more curbside delivery.”
Horwitz adds there is also concern about sales among retailers heading into the holiday season.
“Already, the estimates for Halloween are showing about an 8%-10% drop in what is expected that people will spend on Halloween and I think when the National Retail Federation comes out with their numbers for the holiday season, we’ll probably see something similar.
He says with unemployment higher than normal and ongoing uncertainty about the future, there will be some hesitancy among consumers to spend as much as they normally would for the holiday season.