Home Blog 2020 The Year's Distractions May Actually Benefit Retail This Holiday
Sep 8, 2020

Will Holiday 2020 Be Another COVID-19 Retail Casualty?

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The short answer is, no. The 2020 holiday retail season may be shaping up to be quite different in the U.S., and most certainly interesting, but it won’t be a bust. Uncertainty surrounding the pandemic and the presidential election, coupled with the Prime Day and back-to-school shopping delays will all be distractions for consumers heading into the holiday shopping season. But it’s not enough to take away from the spirit of giving that drives the holiday retail season – the season’s distractions could actually play in the favor of some categories and shopping channels.

Despite store closures, stay-at-home restrictions, and concerns over personal health and finances, consumer spending in general merchandise industries exceeded last year’s results through much of May and June. Some categories fared better than others, creating concern that pandemic purchases have stolen from sales that would have otherwise occurred at holiday. Sure, for big-ticket items, like bikes and big screen TVs, we may see the impact of sales being pulled forward; but in most cases, the growth that has occurred isn’t enough to impact holiday sales – even the breadmaker boom left room to grow household penetration. As for the categories that didn’t see as much activity earlier in the year, like fashion apparel and accessories, pent-up demand, and a general desire for something different could make holiday their time to shine.

Current limitations on experiences, coupled with consumer hesitation to go out like they did pre-pandemic, will have consumers favoring more tangible gift items this holiday. Experiential gifts, like spa certificates, had grown over the past couple of years, but that trend will be disrupted this year. We’ve already seen this happen over the recent Mother’s and Father’s Day holidays, where popular general merchandise categories saw sales lift for the week that was two and three times what it was in 2019.

The same hesitation to go out that will benefit tangible gift items will pose challenges for brick-and-mortar retail. Couple the hesitation to go out with the increased acceptance of e-commerce and the result will be the most competitive and digitally-dominant holiday season we’ve seen. Retailers big and small, online and offline, will all be jostling to get the consumer’s attention and dollars.

Just like the first half of 2020, the coming holiday season will be riddled with rapid and unpredictable changes. But, even amidst the uncertainty of a year that is different than any other in recent history, holiday brings with it an element of stability we can look forward to. The holiday season is a time that generally makes us feel better, a time we look to share with family and friends and reward ourselves. This holiday spirit, along with our proven resilience through challenging times, will deliver holiday hope at retail in 2020.

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