Aug 24, 2020
This coming holiday season is expected to see the earliest promotions ever, although many of the reasons are tied to the pandemic rather than getting a jump on the competition.
Target plans to start holiday promotions in October to support social distancing. Target said in a statement, “Historically, deal hunting and holiday shopping can mean crowded events, and this isn’t a year for crowds.”
The retailer, along with Walmart, Best Buy, Dick’s Sporting Goods, Kohl’s and several others, has announced plans to close on Thanksgiving, signaling that Black Friday events may be toned down to avoid over-crowded stores.
Some are already promoting omnichannel options, including curbside pick-up, to holiday shoppers, in part, to better manage in-store crowds.
Michelle Gass, Kohl’s, CEO, also sees shoppers looking to start their holiday shopping as early as October. She believes many are looking for “reassurance that the product that they want to buy is going to be there” after their experiences with heightened online demand in recent months. Retailers are generally planning back-half inventories conservatively given COVID-19’s uncertainty.
Amazon Prime Day, expected to be held in October, is likely to contribute to the pull-forward holiday buying trend, according to Coresight Research.
Getting consumers to make their holiday purchases earlier than usual is also expected to help reduce the impact of spikes in shipping surcharges. UPS has announced plans for significantly higher holiday peak surcharges to offset the surge in residential drop-offs, while U.S. Postal Service (USPS) in mid-August said it would be adding holiday surcharges for the first time.
Holiday promotions have been creeping back toward Halloween for years and they run the risk of giving shoppers holiday fatigue.
Retailers are being encouraged by logistics firms to at least add some variety to the promotions rather than steady across-the-store deals, according to a Reuters report. Scott Sureddin, DHL Supply Chain CEO for North America, said, “It can’t be a blitz of every single product you have online. Let’s pick and choose.”
DISCUSSION QUESTIONS: Do you see more benefits than drawbacks in holding promotions earlier this holiday season? What suggestions would you have to better balance the peaks and valleys of holiday shopping activity and avoid holiday fatigue?
“Instead of planning for and promoting a holiday rush, steady, ongoing promotions that drive consistent traffic to stores could help achieve sales targets. “
“Watch out supply-chains! Early, steady purchases could lead to extra product on the shelf come later in December.”
“Retailers are concerned that as we approach the holidays, a combined flu and a resurgent COVID-19 will force the second wave of store closings.”
