2020 Holiday Shopping Trends with LSU Marketing Professor Dan Rice
BATON ROUGE - Whether people shop out of necessity, for holiday gift-giving, or to escape 2020, LSU Associate Professor in Marketing and Director of the E. J. Ourso College of Business Behavioral Research Lab Dan Rice, shares insight on trends he expects to see the last two months of 2020. With the holidays right around the corner and so much unknown due to the COVID-19 pandemic, Rice breaks down what holiday shopping means in 2020.
What do you expect to see this year for holiday shopping?
Of course it’s hard to say exactly what will happen in the future with so many unknowns due to COVID-19. The current trajectory looks promising for online sales, but the outlook isn’t as clear for brick and mortar locations. As noted in a recent CNBC article, U.S. Census Bureau Data showed nearly a 32 percent increase in online sales for the second quarter relative to the first quarter of 2020. Prime Day’s total sales were north of $10.4 Billion, an increase of 45.2 percent overall. However, this increase, while slightly bigger in absolute dollars, was significantly smaller in percentage than the previous year’s mark of over 70 percent increase.
Prime Day’s growth likely benefits from that general trend, and the increased familiarity and enthusiasm for the recently created annual event. Overall though, total retail sales were down roughly 2-4 percent over the first two quarters of 2020. A lot of that decline is absorbed by offline sales, which means brick and mortar locations. Some companies like Walmart and Target, for example, are well-positioned with online presences that help to balance out any in-store losses.
Another trend to watch is how specific gains or losses are to a particular segment. For example, sales in the home improvement and power tools segment have generally been very good – as people are staying at home more, they take on more home improvements. Then as they want to get out and exercise, they spend on that, so bike shops benefit. If you try to buy a bike right now, in-stock options and parts are low, which indicates in general that sector’s doing well. Of course, there are exceptions too, and again, it’s the ones with the online presence that likely see the biggest gains even if the final sales occur in a physical location.
On the flip side, sectors that require in-person presence (think restaurants, movie theaters, playhouses, etc.) have really suffered, as many have been limited by the stay-at-home orders. Many have closed their doors, and many are hoping to see enough sales this holiday season to keep them afloat. So, perhaps if you have a particular local company or service that you like, buying local this year would be a really good idea to make sure that they can weather the storm.
This year, more stores have announced that they will be closed on Thanksgiving and
are starting their Black Friday sales even earlier. How could that impact sales?
I guess this is really the multi-billion dollar question. I actually kind of like to see the trend of not opening on Thanksgiving to give people more time with their families (though it might be a smaller group than normal this year unfortunately due to the pandemic issues). There have been a small number of companies, REI and Home Depot come to mind, that have a history of staying closed on Thanksgiving, with REI even staying closed on Black Friday. More retailers have followed suit this year and decided to open their stores on Friday instead of Thursday evening. The main issue for most stores is to make sure that the holiday sales are strong. If consumers are willing to purchase on Friday or online, that might be okay.
Another trend is the earlier and longer access to Black Friday deals. Even before the pandemic, some retailers were announcing deals earlier and earlier in the year, and the pandemic has kind of supercharged this trend. Many companies are now claiming that their Black Friday deals are out and will be honored for a month or more. Whether it’s true that we’re already seeing the “best” deals or not remains to be seen. It’s always good to be skeptical and do your homework to make sure you’re getting a good a deal as you think – and in many cases you might be. Just be informed.
The chief economist for the National Retail Federation, or NRF, said on October 1
that he’s “cautiously optimistic” for fourth quarter sales, how would you describe it?
He’s really a true expert on the applied day-to-day stuff, and the NRF is usually pretty accurate with its projections. I think he’s phrased it in a really telling way. There are a lot of good signs, but there are also a lot of signs for caution. Many people are employed, or were formerly employed, by industries and sectors that have been hit hard by the pandemic. Spending in those groups is likely to be focused on necessities and potentially reduced. Even people who are doing okay currently might be worried about the next few months and try to curtail spending. That said, for some a natural response to the stress of the pandemic is to shop and buy things either as a coping or escape mechanism. That would tend to push sales up. So the future kind of depends on how many people are avidly shopping for extras this holiday season.
Contact Rachel Holland
LSU Media Relations
LSU Media Relations