Can Retailers Recover The Holidays?
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Well, the Wall Street Journal has declared it: the first half of 2020 brought us the largest number of bankruptcies, liquidations and store closures in history. The list is long and includes iconic retailers. I’m not going to list them here, as you probably know them as well as I do.
The real question is, where do we go from here?
While it’s easy to list the large retail chains that have gone belly up, there are also countless independents who finally just gave up the ghost and closed their doors. I know some of them.
Where I live, in Miami, we had a rough, rough time getting the pandemic under control. Local officials instituted curfews, fines for not wearing masks, and business requirements for social distancing.Now, the governor has decided to remove all local restrictions.The state is open, period.No curfews, no fines, and schools must open by October 5. I suppose he’s preparing for the tourist season, when no doubt, the state brings in a lot of revenue.
We can talk about the cost of those decisions in a few weeks or months.Meanwhile, away we go.
Does all this bode well for a good holiday season?Boy, it’s hard to say.On the one hand, there’s a lot of pent-up demand for company and attention. On the other hand, unemployment remains high, we’re about to have a wild, wild national election in the US, and people in colder climates will be driven indoors by cold winter air.
I expect toys to do really well over the holidays, though license sales will likely be light (not enough movies to create a license buzz on any character). Kids are bored. Electronics? I’m not sure. Probably small stuff.
In fact, in general I suspect products that sell well over this holiday season will be inexpensive, entertaining and – solitary. In other words, and I’m trying not to play angel of doom here, I expect to see the number of cases rising again. Denial doesn’t make something go away.
We have covered many of the other steps retailers must take:
- Take care of your workforce.Steve and I are busily going through new data on workforce management for an upcoming benchmark report. It’s clear that employees are more important than ever. On the one hand, in-store employees must wear their masks. But in addition, distribution centers and warehouses should have proper social distance guidelines, with compliance processes and technologies to support employee health.A spiff for workers that work extra hours would be nice, too
- Make sure you’ve got your contactless sales processes in order.All variations from pure eCommerce, to buy online, pick up in and around stores have to be smooth and efficient.If sales will be sparse, we can at least try to make them profitable
- As I’ve talked about before, a wise retailer will create and monitor its own procedures. Compliance to your own standards is key. As of this moment, the government is providing little to no real guidance. Stick to your corporate decisions. I feel really good about Walmart and Target leading the way in that regard. Chain drug stores will need extra care, as they prepare for the influx of people needing and wanting flu shots
- Add security in stores. There are a lot of angry people out there, and the politicization of mask wearing is a real thing and has caused more than one employee to be hurt.
There are a lot of things that will occur between now and the holidays. We have an election in the US. We likely will have more civil unrest, regardless of the winner. People are worn out, yet energized at the same time.
I am hoping we have a decent holiday season. While it’s going to be hard to control the top line, the bottom line is really up the retailers themselves. We’ve been at this for more than six months. Grocers have reaped a windfall, even as out of stocks remain stubborn. Apparel rules have changed.Even TV commercials talk about that now.
I think the keys to success will be price, convenience and efficiency.Are you there yet? If not, it’s time. Brian gives some compelling data in his piece this week for why Halloween may still be productive for retailers, but absent all those parties and trick-or-treaters, my gut feel is that it will still come up light, financially (one of the best parts about working at a company that doesn’t force a unified opinion). And Thanksgiving will be much quieter than usual. You have time to get it right. Now is the time.