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As Black Friday’s Role Shifts, Retailers Must Get in Front of Changing Shopping Patterns

Now that Amazon Prime Day has kicked off, retailers are officially in holiday mode, but how they adapt to the current changes brought on by the earlier shopping push will be the determinant in their overall success. Across stores, inventory, fulfillment and management, one thing is clear: they must act now, especially as Black Friday-esque sales land earlier and earlier on the calendar.

Michael Brown, partner in the consumer practice of global strategy and management consulting firm Kearney, noted that it’s critical to start the holiday season early given the factors that are already known, such as store occupancy restrictions and shipping capacity crunches.

But the unknown questions still at bay tell the true story of the season, he added.

“Will our workforce remain healthy? Will our suppliers be able to ship what we need? With a second wave of the pandemic possibly resulting in more store closures, retailers need to strike while they have the opportunity,” Brown said.

With more than one full month to go before Thanksgiving week, answers to these questions will emerge as the season unfolds, making it even more important for retailers to get out in front of any potential problems that may arise. Beyond any issues that could impact the season, retailers also would stand to benefit from learning about current consumer spending trends, and comparing them to holidays past.

“Early reads will allow them to chase goods for December sales and act quickly to sell the slower selling categories where they have built inventory,” said Brown. “If they don’t act now, retailers stand to lose early data on consumer shopping patterns and sentiment, their fair share of limited dollars, and access to the most desirable holiday hires. Retailers need to use advanced analytics as never before to proactively monitor competitors, suppliers, consumer response and health and wellness trends and react quickly to what will be a rollercoaster of a holiday season.”

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Analyzing the right trends now plays heavily into handling sales and traffic well, especially once November and December come. In a CommerceNext holiday webinar, Kate Huyett, chief marketing officer at Bombas, noted that as her sock startup aims to pull demand forward, it is shifting its dollars further ahead, with the aim to diversify its overall channel mix so it can reduce dependence on a specific sales channel.

“I think we’ve continued to improve our ability, our understanding of how the different channels interact with each other,” Huyett said. “So for us, one of the big things that we keep a close eye on is the mix between online and offline, because as we get bigger in our budgets, and our channels are interacting with each other more at scale, you can’t just sort of yank back one channel and expect that efficiency in that channel is going to improve and improve everything. It’s much more of an ecosystem.”

Black Friday, in-store sales declines put onus on store managers

Retailers are bracing for a possible decline in Black Friday spending and in-store spending overall. The Black Friday period has been forecast to shrink by 22 percent this year, based on research by e-commerce consultancy Wunderman Thompson Commerce, while 49 percent of retailers predict in-store holiday sales will decrease year over year, a survey from Ultimate Kronos Group (UKG) pointed out.

Amanda Nichols, senior manager, retail, hospitality, and food service practice at UKG, noted that store management teams are more vital than ever in developing store success amid a potential downturn in traffic.

“Retailers are requiring employees to wear masks, retailers are requiring customers to wear masks, and they’re increasing the frequency of their cleaning. They have to enforce social distancing, and there are many of them requiring employee health screening,” Nichols told Sourcing Journal. “A lot of them have to manually monitor and limit store count. The manager is responsible for executing on all of this, in addition to everything they’ve always had to do for their job. If they’re not able to execute, and if the customer experience falters, because of this, it could have a direct impact on their revenue.”

As many as 72 percent of retailers anticipate store employees will feel anxious or stressed about Covid-19 while at work, and the majority (81 percent) think it’s possible that employee concerns about the virus could lead them to quit midseason, the UKG study said.

Black Friday shift impacts promotions, employee roles

Black Friday’s status as the king of the holidays has taken hits in recent years as shoppers gravitate online, but its role in the season may see even greater this shifts this year.

While 52 percent of U.S. shoppers say they are excited about Black Friday shopping this year, 29 percent say they don’t plan to shop much this year, according to a Piplsay survey. Of the 30,000 shoppers surveyed, 37 percent plan to reduce their shopping budget this Black Friday.

The apparent consumer emphasis away from Black Friday should impact the way brands approach their holiday promotional strategies as a whole, according to Jake Cohen, head of product marketing at e-commerce marketing platform Klaviyo.

“We have talked to a number of brands who have decided to go with sitewide sales in an effort to streamline and make things easier for their customers,” Cohen told Sourcing Journal. “It has been a difficult year for many, and brands have said that they just want to keep it simple. While most brands prefer more targeted sales that allow them better control over margins, they also know the e-commerce competition this year will be fierce, and as a result, they’re going with simplicity in an effort to win.”

Although Sensormatic Solutions still expects Black Friday to be the busiest in-store shopping day this year, it says the typical holiday traffic peaks will flatten, with more days sharing importance throughout the season. In fact, the 10 busiest in-store shopping days in 2020 will account for 34.2 percent of all holiday traffic, a large dip from the 46.5 percent they encompassed in 2019.

Sensormatic Solutions expects in-store traffic for the six weeks of the season to be down between 22 percent and 25 percent year-over-year. Amy Shulman, global head professional services/ShopperTrak traffic insights at Sensormatic Solutions, noted that this is a major improvement from earlier in the year, when traffic was down as much as 82 percent in April and 38 percent in the summer period between Memorial Day and Labor Day.

As store traffic decreases, so does the emphasis on the store employee. Now, it appears focus is shifting to employees who can help fulfill e-commerce orders.

“Is the product there?” Shulman said. “You’re now ordering from so many different places. All of that is making inventory tracking so important so that the customer is happy when they go to pick it up. We’re hearing from some of the big-box retailers that they’re using the parking lot as an extension of the store now, because so many people have ordered online and they want to have it picked up curbside.”

Gap, Dick’s bring more holiday hires to fulfillment, curbside

With traffic spread out among both days and times, retailers also must rethink labor strategies to handle inventory and fulfillment during days that previously weren’t busy, according to Shulman.

Now that Gap Inc. says it acquired 3.5 million new customers through its online channel in the second quarter, it is prepping for a potential crush of shoppers by doubling its seasonal hires from 5,000 employees to 10,000 across customer contact centers and fulfillment hubs.

To meet the anticipated online surge, Gap is looking to fill roles across the business that will include packing, assembling merchandise, preparing orders for shipment, serving customers through its customer contact centers and additional staffing for contactless services including the recently rolled out curbside pickup and BOPIS options.

Dick’s Sporting Goods, too, is hiring as many as 9,000 workers for the holidays, upping its seasonal workforce by more than 1,000 from last year. The sports-themed chain plans to pay workers a 15 percent premium through the end of the year, and give workers discounts of up to 25 percent on its products, it added.

Dick’s didn’t specify how many employees are designated to the stores and the fulfillment centers, but the company pointed out its push into curbside pickup and ship-from-store orders, both of which have been tremendous growth drivers for the retailer’s omnichannel operations.

In the second quarter, more than 75 percent of e-commerce sales were serviced at Dick’s stores, illustrating the potential that omnichannel has for the holiday season.

Jennifer Benda, director of user experience design at Dick’s Sporting Goods, attributes the success of the program to associate feedback on what customers were telling them early on, whether it was that the signage wasn’t readable or that they tried calling but didn’t get a response on the other end.

“We were starting to say that ‘Hey, come holiday time, we need to cut down on the folks in our parking lot for a significant amount of time,” Benda said during the CommerceNext webinar. “At that point, lines in the store are one part, but we’re going to have lines in the parking lot now, right? It’s about how you move people through that. So those are all logistical considerations that retailers have to consider today in preparation for the holiday for them to be set up for success and the change in consumer behavior.”

Many retailers are now following this example, with 83 percent saying they will offer curbside pickup in at least some stores, compared to just 44 percent in 2019, the UKG study said.

Nikki Baird, vice president of retail innovation at Aptos, cosigned Benda’s opinion, noting that communication is required for the tool to remain effective, especially in colder weather if shoppers will be waiting in their cars for an associate to bring out their order.

“For a fairly straightforward process, there seems to be an infinite variation in how that process can be executed,” Baird said. “On the website before the customer is placing the order, you need to communicate with them in the order confirmation and communications about your order status. You need to communicate with the consumer how it’s going to work in the notification that they get if there’s a text message saying ‘We’ll be at your car door in just a minute.’”

Last-mile delivery comes down to trust

While fulfillment players have been steadfastly looking to ramp up during the season, with companies like XPO Logistics, Radial and Geodis among others that are hiring, logistics heavyweights like FedEx and UPS are aiming to hire 70,000 and 100,000 seasonal workers respectively. And last-mile delivery company Shipt has made a mad dash to bring in more manpower with the goal to hire additional 100,000 “personal shoppers” this holiday season, bringing the company’s nationwide delivery base to over 300,000.

Although owned by Target, Shipt delivers for nearly 120 retailers across the U.S., with recently announced partners including Party City, Bed, Bath & Beyond and Buybuy Baby.

Baird noted that for most retailers, working with a major third-party delivery provider isn’t just about expediency, but transparency, so they feel they have some control over the last mile. Retailers can often lose that with a third party, but have an easier time spreading their delivery network in the short term through partnerships.

“Retailers have long been cautious around dropship, and making sure that they have good visibility and some control over the dropship experience,” said Baird. “And I think they’re looking for the same from a home delivery. I’ve talked to a few retailers that have decided actually to opt for local resources even though there’s a coordination cost of doing that, like you can only do it in the markets where those capabilities are available. But these retailers trust that these are people who really care about that experience.”