Among other things, 2020 has been a nightmare for the retail industry. The inability to shop in-store for several months in the spring and summer left an overflow of summer merchandise that had retailers scratching their heads. And several stores felt an additional squeeze when back-to-school shopping was thwarted by the decision of many school districts to pivot to remote learning. This upheaval has created a reduction in profits and an even lower margin for purchasing added inventory. That leaves big box stores with a serious cash-flow problem that severely affects their ability to buy holiday merchandise.
To compound matters, retail shopping may not be able to bounce back with record numbers of COVID-19 cases ramping up nationwide at the onset of the holiday season. Many people may skip the risk and shop online. As a result, the surplus of in-store inventory will continue to rise, and brick and mortar retailers will continue to suffer.
Proxima 360 is a high impact solutions management consulting company that addresses critical business needs within the complex retail landscape. The professionals at Proxima 360 work with some of the nation’s top retail brands meeting both their operational desires and their technical needs.
In October, Proxima 360 predicted retailers would announce month-long sales as consumers and sellers began to gear up for the holidays. “Given the ongoing pandemic and the strain its placed-on inventory, shipping and sales, we are predicting that retailers, both eCommerce and brick and mortar, will soon announce a month-long Black Friday promotion,” said Anil Varghese, CEO of Proxima 360. And this strategy has already made itself known, with some large retailers lining their aisles with inventory much the same way they do during Black Friday.
Brick and mortar stores are not the only ones feeling the pinch. Since the pandemic onset, supply chains were tested by trade restrictions, supply shock, and an increase in demand. “In order for e-commerce to sustain its growth and for retailers to make up for the losses they’re experiencing in brick and mortar locations, they’ll need to firm up their supply chain,” said Carlos Diaz, director of business development for Proxima 360. Diaz adds that avoiding out-of-stock issues will be the biggest challenge for retailers this holiday season. The month-long ultra sales events practically solve this issue by allowing stores to gradually meet their numbers and guarantee product availability.
Another supply remedy Varghese and Diaz predict is a change in the way retailers provide products this holiday season. They say consumer habits of doing all holiday shopping in the final weeks won’t change. But with shipping and product availability slowed, retailers will need to find a new way to regain momentum. Varghese and Diaz predict that eCommerce sites will use malls and strip malls as pick-up points so they can avoid shipping delays and create a unique holiday shopping experience. This strategy will allow shoppers to purchase items late in the season and be guaranteed to have them in time for gifting. Varghese and Diaz also add that if brick & mortar retailers partner with eCommerce venues and allow pick-up locations at their stores, it will drive more consumers to their merchandise and stimulate sales.
In a year of uncertainty, one thing is certain — retailers will look to every viable strategy to salvage this year. And when 2020 comes to a close, they will want to look back and say holiday sales saved their bottom line. Even with all the changes 2020 brought, everyone — retailers and consumers — needs to be mindful that while the holiday shopping landscape may be different this year, the spirit of the season remains.