The 2020 holiday season may just kill Main Street
Online retail and e-commerce have been chipping away at brick-and-mortar businesses over the years but the combination of the coronavirus pandemic and the 2020 holiday season may prove to be a knockout blow.
The state of play: Anxious consumers say financial concerns and health worries will push them to spend less money this year and to do more of their limited spending online.
Driving the news: Deloitte's latest global survey of consumers finds shoppers plan to spend an average of $1,387 per household, down 7% from 2019.
- With nearly one third (29%) of respondents saying that their household’s financial situation is worse this year than last, 38% of consumers say they plan to spend less on the holidays, the most since the Great Recession.
By the numbers: Almost 51% of holiday shoppers feel anxious about shopping in-store, and 64% of holiday budgets are expected to be spent online.
- Spending is expected to shift to non-gift purchases for celebrations at home (up 12% from 2019), and travel is expected to decline 34% year over year.
- The average shopping window is expected to be 1.5 weeks shorter this year.
On the other side: Amazon's Prime Day — the unofficial start of the 2020 holiday shopping season — delivered a 71% increase in spending from U.S. shoppers over 2019's July event and a 66% increase globally, according to Salesforce data.
- Traffic to digital sites increased by 40%, even eclipsing 2019's Black Friday (9% growth) and Cyber Monday (11% growth) digital traffic.
While the rising tide of Prime Day has lifted all retail boars in the past, this year brick-and-mortar firms haven't seen nearly the same increase.
- According to data from foot-traffic tracking firm Placer.ai, Whole Foods saw visits fall 32.1%, while Target, Walmart and Best Buy were down 15.9%, 19.1%, and 11.6%, respectively, compared to July 2019.
What's next: A new poll from Alignable finds 45% of consumers shifted from local purchasing to online shopping when their COVID fears were greatest and many have not gone back.
- More than half (52%) say they don’t expect to change their current shopping habits for the holiday season.
- Another 16% plan to increase their spending at national, online retailers instead of shopping locally.
The bottom line: Alignable survey analysts note, "Given this data, there's a chance some Main St. retailers will completely miss out on much of the holiday shopping season — devastating news for many who are already in jeopardy of shutting down for good."