US retailers have revealed their earliest-ever holiday sale plans this year.
The coronavirus pandemic has changed the way that consumers shop, resulting in major retailers and shippers putting plans in place for their earliest-ever shopping season.
Retailers such as Target, Best Buy and Kohl’s have brought forward winter holiday promotions to as early as October and have joined Walmart in announcing store closures on Thanksgiving. Black Friday will not see midnight opening from such retailers this year, as the highly publicised promotional activity that traditionally kicks off holiday trading across the US is incompatible with current social distancing recommendations. Indeed, in-store Black Friday sales look to be doubtful, although retailers say they are still considering how best to approach the landmark shopping date.
Kohl’s chief executive Michelle Gass said that “a holiday season like no other” means emphasizing the categories that are in demand at the moment, including toys, which continues to perform robustly.
Target CEO Brian Cornell has revealed that the retailer will promote same-day delivery and vastly increase the numgber of items available to be ordered during the “very different holiday season.” Same-day delivery takes some of the strain off delivery firms like UPS and FedEx, as it is carried out by “gig” drivers for courier companies.
Walmart, Kohl’s and Target have all reported that the back-to-school season, the second most important for retailers, has been “slow” and “uncertain,” due to uncertainty over school reopenings. Target has already announced it would extend back-to-school deals this year.
Ecommerce is expected to reach a record 15% of all US sales this year, and retailers are exploring the most cost effective strategies. Some logistics firms are urging retail clients to pace promotions, and be selctive in their offers, in order to avoid overstretching delivery capacity, with shipping companies adding high surcharges and limiting shipments for some customers during peak season.
Average daily package volume at UPS hit 24.4m during the second quarter, almost 92% of the fourth-quarter holiday peak. The US Postal Service, which is estimated to handle almost 40% of last-mile home deliveries, is already at breaking point and bracing for a holiday volume spike on top of already pandemic-fueled demand that has been dubbed a “second Christmas.”
By starting promotions early, in some cases before Halloween, retailers could potentially spread out delivery demand, easing pressure on logistics companies. Analysts and investors believe the idea could help draw shoppers back, as footfall in retail centers remains sluggish, although the strategy also runs the risk of giving shoppers holiday fatigue.
