Tuesday , October 20 2020

Amazon’s Prime Day adds to retailers’ scary October

Most years, the end of the retail industry’s sales calendar is defined by a tidy succession of seasonal events: back-to-school, Halloween and Christmas. With the pandemic, this isn’t an ordinary year. The result? Those shopping rituals are poised to converge into a super season of sorts in October, creating a tricky balancing act that is bound to trip up some retailers.
Back-to-school shopping usually crests in August, but it got off to a slow start this year amid uncertainty around whether learning would be virtual or in-person. Accordingly, chains including Target Corp, Gap Inc, Macy’s Inc and Abercrombie & Fitch Co have said they expect an elongated season for buying these goods, perhaps stretching into October. That means they’ll need to continue keeping ample inventories of lunchboxes, backpacks and fall clothing even as shoppers begin to look for costumes, candy and decor ahead of Halloween. Adding to the mix, the industry is preparing for an unusually early start to Christmas shopping, on the theory that people will want to get a jump on their gift-buying — or can be persuaded to do so — to avoid being shoulder-to-shoulder with fellow shoppers in December. So chains such as Target and Kohl’s Corp have decided to begin their holiday deals in, you guessed it, October.

Never-Ending Christmas
And there’s more. In
the middle of the weird blurring of seasons, Amazon.com is set to hold its annual Prime Day deals bonanza. The event, usually held in July, was postponed as the e-commerce giant adjusted to an onslaught of pandemic-related demand. Amazon announced on Monday that it will kick off the sale on October 13.
Retailers recently have sought to piggyback on Amazon’s mega-sale with discount blitzes of their own. But given that the timing of this year’s sale had been up in the air for so long, rivals haven’t
had much ability to plan around it. They’ll need to scramble now. (Target, for one, has already announced its own “deal days” starting October 13.)
All of this makes for a merchandising and marketing nightmare. Do you deck out your mannequins in first-day-of-school outfits or jack-o’-lantern
pajamas? Do you give prominent shelf space to pumpkin-spice treats or gingerbread cookies? Do you offer deep discounts on desk supplies or Christmas cards?
It’s not just that these shopping events are colliding, it’s that consumers will be approaching them
differently this year. Halloween spending is expected to drop to $8.05 billion from $8.78 billion last year, according to the National Retail Federation, as fewer people attend parties or trick-or-treat. Retailers have tried to adapt, with Costco Wholesale Corp., for example, saying it is carrying only about 80% to 90% as many Halloween costumes as last year.
Meanwhile, Children’s Place Inc reduced orders for dressy kids’ clothes for the fourth quarter, assuming they won’t be hot items amid a dearth of big holiday get-togethers.
Even as many retailers gird for an early start to the holiday gift-buying season, there’s a fair chance the
opposite happens. With so many Americans out of work, and uncertainty about how safe a large gathering will feel in December, I see good reason to delay holiday shopping, much as people have done with back-to-school spending. That, too, could throw off retailers’ game plans for October and the rest of the year.
If Santa really does get to work in October and sales start to take off then, industry watchers will find it difficult to even assess how this year’s gifting spree compares to expectations or to results in previous seasons. Deloitte’s 2020 holiday forecast, which calls for modest growth, is for the November through January period.
Retailers can take some comfort in the fact that consumers still appear hesitant to spend money on traveling and have few options for buying items such as sports tickets, leaving room in their budgets to spend at stores. Still, October is shaping up to be an unusually messy month, one that is bound to leave many in the industry with too much or too little inventory and frustrated customers. The ones that do best will likely be those who initially bought merchandise conservatively but then positioned themselves to make “chase” orders in season once they see what is actually selling — and when.

—Bloomberg

Sarah Halzack is a Bloomberg Opinion columnist covering the
consumer and retail industries. She was previously a national retail
reporter for the Washington Post

About Admin

Check Also

Trump’s Republican vision is ‘America first’

Even before Hillary Clinton conceded defeat in 2016, the aphorism “It’s Trump’s party now” had ...

Leave a Reply

Your email address will not be published. Required fields are marked *