Retailers have experienced a stark split in fortunes during the pandemic. The mass shutdowns this spring fueled big–name bankruptcies and thousands of stores closures. And the strong like Amazon and Walmart have only gotten stronger and more profitable, driven by their online businesses and ability to supply everything people need while stuck at home, from food to electronics.
Now, all retailers are entering their most important time of the year — the holiday shopping season that has long revolved around Black Friday.
Traditionally, the day has been known for doorbuster deals and early morning in-person shopping. This year, many of those deals began as early as October and were offered online, reflecting both the challenges physical stores face in the pandemic and the shift in how consumers prefer to shop.
About 59 percent of shoppers had started their holiday shopping by early November, according to the National Retail Federation. And more of that shopping is occurring online. E-commerce sales are expected to grow by as much as 30 percent over last year’s holiday season, the trade group said.
Over all, the industry group, which is usually bullish, said holiday sales could rise between 3.6 percent and 5.2 percent, compared with last year’s 4 percent increase.
Whatever the size of the increase, it is remarkable on many levels that Americans, on the whole, are expected to spend more this holiday season than last.
The retail industry has evolved rapidly to meet the strong consumer demand this holiday season, transforming department stores into fulfillment centers, building new warehouses, hiring hundreds of thousands of workers mostly to fill e-commerce roles, and extending curbside pickup.
And yet, for all the upending of shopping habits this year, stores are still hoping for Black Friday crowds on Friday. Best Buy and Walmart, for example, are offering many of their deals in stores, starting at 5 a.m.
Early last month, two Macy’s stores, in Delaware and Colorado, went “dark,” meaning employees are primarily using the spaces as fulfillment centers where they process online orders and returns rather than a place for customers to browse and shop, Michael Corkery and Sapna Maheshwari report.
The forces propelling online shopping were set in motion long before the pandemic. But charting the decline of many brick-and-mortar stores and the simultaneous growth of e-commerce in the past seven months is like watching the industry’s evolution on fast forward. In the future, 2020 will be seen as a major inflection point for retail.
Jeff Gennette, Macy’s chief executive, said the dark stores are part of an experiment as the company responds to customers buying more online and demanding ever-faster shipping for free. But the conversion of a department store into a fulfillment center, even temporarily, reflects how retailers are succumbing to the dominance of e-commerce and scrambling to salvage increasingly irrelevant physical shopping space.
Last week, Walmart, the nation’s largest retailer, reported that e-commerce sales increased 79 percent in the third quarter, while its rival Target said its e-commerce business was up 155 percent. Amazon’s sales increased 37 percent and its profit was up nearly 200 percent in the most recent quarter.
Retail executives said that staggering growth was not a fluke of the pandemic lockdowns, but the result of a permanent shift in how people shop.
Black Friday has long been the biggest shopping day of the year, with doorbuster deals inspiring some die-hard shoppers to camp out all night in front of big-box stores.
But as coronavirus cases climb across the country and public health officials beg people to avoid crowds, will stores still try to lure customers inside? And if they do, will customers take the bait and show up?
“This year is going to be a Black Friday unlike any other,” said Kelly O’Keefe, managing partner at the Brand Federation, a consulting firm. “We’re not going to have crowds knocking down Walmart’s door this year. There will be fewer people in stores and there will be much better management of those people.”
Here’s what some of the biggest retailers are doing to keep customers safe on Black Friday this year:
Best Buy
Best Buy said it was selling this year’s new gaming consoles online only, to avoid lines outside stores.
The electronics chain said it would limit the number of customers inside stores to comply with social-distancing guidelines as recommended by the Centers for Disease Control and Prevention. Best Buy also said it would consider limiting store hours, reducing occupancy and shifting to curbside-only pickup service “on a case-by-case basis to help local communities contain outbreaks.”
All pickup orders will now happen curbside, and pickup will be available before and after in-store hours.
The stores will require customers and employees to wear face coverings and will supply face coverings to customers who do not have one. Best Buy will provide sanitizer wipes near high-touch displays to give the customers the option of wiping down surfaces before engaging with them.
Walmart
Walmart put on three separate sales in November, both online and in store.
It is offering customers the option to pick up their online Black Friday orders through Walmart’s contactless curbside pickup service.
On Black Friday itself, Walmart stores will open at 5 a.m., and customers will be asked to form a single, straight line to enter the stores. Employees will hand out sanitized shopping carts and will remind customers to wear a mask when entering the store. Walmart will limit the number of customers in the store to 20 percent capacity and will direct customers to shop down the right-hand side of aisles.
Target
Target has spread its sale offerings throughout all of November, offering promotions of different product categories each week.
To minimize lines, Target has added mobile checkout devices to allow store employees to help shoppers check out anywhere in the store. The company also allows guests to check out by themselves using Target’s mobile app.
Additionally, the company has added thousands of items eligible for same-day pickup.
Target says it will monitor the number of shoppers to ensure people have enough space to shop safely and will allow customers to reserve a spot in line outside their local store.
Home Depot
The home improvement retailer has made Black Friday prices available throughout the holiday season, from Nov. 6 through December, both in store and online, in an effort to reduce crowds. Home Depot said it had reduced the number of items displayed in certain areas in stores to create more space for social distancing.
The start of the holiday shopping season brings renewed concerns about the safety of retail workers amid rising coronavirus cases around the country.
But these worries, for the most part, have not yet resulted in significant pay raises for the workers to compensate them for the increased risks. Companies like Amazon, Walmart and Kroger have all ended pay raises or bonuses that they gave out in earlier months of the pandemic and have not signaled plans to restore them.
“There has not been a day that I and my co-workers do not worry about our health and safety,” Janet Wainwright, a Kroger worker in Yorktown, Va., said during a conference call organized by the United Food and Commercial Workers union on Monday.
This week, labor unions and think tanks have been pressuring retailers to increase their pay by highlighting the companies’ huge profits during the pandemic and how relatively little of that windfall they have been sharing with their employees.
A report by the Brookings Institution found that the top 10 retail companies have generated, on average, $16.9 billion in additional profit this year compared with last year, a 39 percent increase. Workers at these companies, however, have only seen average wages increase by $1.11 per hour during the pandemic.
On Wednesday, the U.F.C.W. reached an agreement with ShopRite that will allow 50,000 workers to receive hazard pay equal to $1 an hour for every hour they worked between July 26 and Aug. 22. The workers will receive this retroactive pay in a lump sum and the company said it would discuss future hazard pay with the union if state or local government begin ordering “nonessential” retailers shut down again, while ShopRite employees must still show up for work.
Retailers are also beginning to face lawsuits from workers and their families who said the companies did not do enough to protect them from the virus. The family of an employee of Publix, in Florida, who died from the virus, recently sued the grocery chain. They claim that the company would not let its employees wear masks in late March even as some health experts began recommending face coverings, according to The Tampa Bay Times.
This year, the term “Black Friday” may seem particularly fitting, with the pandemic casting a pall over a holiday usually known for its joyous, unselfconscious commercial excess. But how did the day get such a gloomy name in the first place?
Historians say it originated in Philadelphia in the 1960s, when throngs of shoppers and tourists would descend on the city on the day between Thanksgiving and the Army-Navy football game. The Philadelphia police took to calling the day Black Friday because officers had to work long hours and deal with bad traffic, bad weather and other crowd-related miseries.
At first, local retailers didn’t like the name. The word “black” in front of a day of the week recalled days like Black Tuesday, the sell-off the day before the stock market crash of 1929; or Black Monday, the day of an even bigger crash in 1987. Retailers tried to rebrand the holiday “Big Friday.” But when that didn’t catch on, they reclaimed the name Black Friday, saying that the holiday was when stores went from the red to the black.
“Black Friday means getting in the black — that’s when you’re making a profit,” said Shawn Grain Carter, a professor of management at the Fashion Institute of Technology. “It was a key indicator for how you would do for your fourth-quarter results. So everybody monitored Black Friday. Some people say it’s a pejorative term, but it’s never a bad thing to make money.”
Starting in the 1980s, Black Friday expanded beyond Philadelphia, with major retailers across the United States using the holiday to unveil their hottest new products and to offer steep discounts for customers willing to line up at the crack of dawn. In the early 2000s, retailers started expanding the shopping holiday into a multiday event, adding Cyber Monday for online shopping, and eventually Small Business Saturday to encourage people to patronize local businesses.