With consumers concerned about visiting crowded brick and mortar stores during a resurgent pandemic, in-store spending on Black Friday this year is expected to fall slightly as online shopping exceeds in-person plans for the first time ever, a survey from consulting firm Deloitte shows.
While Black Friday has long been a social event for many people who browse stores together with friends and family in a search for holiday deals, that concept will likely be put on hold this year, since many states have announced social distancing mandates in place to fight a “second wave” of dangerous Covid-19 infections, the New York-based firm said in its "2020 Deloitte pre-Thanksgiving pulse survey."
Instead, 58% of respondents in the poll said they plan to shop online that day, eclipsing the 41% who say they plan to visit stores in person on Black Friday. That marks a role reversal from last year, when in-person shopping topped online by a margin of 61% to 51%.
Store revenues are expected to take a hit from that conversion, with consumers saying their expected shopping budget for the period for the Thanksgiving period stretching from Thursday to Monday would be $401, down 3.3% from last year.
The statistics came from a poll of 1,200 adults nationwide, conducted online by an independent research company between October 29 and November 2. Those results reinforce another recent study by Deloitte predicting that online shopping growth will intensify through the end of 2020, supported by “contactless” experiences and free shipping and returns.
Despite the potential impact on Black Friday patterns, the National Retail Federation (NRF) today forecast that holiday sales during November and December will still increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion. The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a 4% increase last year and an average holiday sales increase of 3.5% over the past five years.
“Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend,” NRF Chief Economist Jack Kleinhenz said in a release. “Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago. After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday. There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season.”
One factor supporting that continued spending will be retailers’ efforts to adjust to the changing conditions, Deloitte said. Many retailers saw the shift coming, and have already adjusted their selling strategy for the peak season, launching promotions and advertising earlier in the year in an effort to “jump start" holiday shopping.
For example, retailers have added new promotions during the third week of October, around Amazon’s Prime Day. And Deloitte’s InSightIQ data found these new promotions were effective in attracting shoppers, boosting sales during the week by 6% over last year. In addition, many retailers began advertising Black Friday promotions in the very beginning of November to give customers plenty of time to adjust to a different holiday shopping environment., Deloitte said.
Consumers in the Deloitte poll said they wanted better deals and lower prices, including more ads (47%), as well as increased Covid-19 safety precautions, including crowd control (23%). Those options were far more popular in the survey than typical retail approaches such as: product availability/avoid stock-outs (13%), convenience-centric planning, including assistance, checkout, and timings (10%), and free or fast delivery and return options (4%).
In other results, the survey found that 74% of respondents plan to shop online during the Thanksgiving period to avoid crowds (versus 62% last year), 57% plan to avoid in-store shopping during the Thanksgiving period to avoid crowds (versus 42% last year), and 57% said they were anxious about shopping in-store during the holiday season due to Covid-19 (versus 51% in September).
“Home for the holidays” has taken on new meaning, as consumers cut back on travel expenses to celebrate with loved ones at home. Download the Deloitte Insights app to learn what they’re planning to spend on instead.https://t.co/7gDlQbyR31— Deloitte US (@DeloitteUS) November 17, 2020