Retailers hope to cut COVID risk – but not revenue – for ‘the most unusual Black Friday in history’
It’s 4:59 a.m. and eager customers are lined up around the block.
Puffy-coated consumers press their wet noses against the windows for a peek inside.
They scurry in as the doors open. It’s the annual elbow-to-elbow war to claim the most discounted prizes of the holiday shopping season. Then they wait in the meandering lines to buy and bag up their loot.
In 2019, this was the picture of a successful Black Friday for retailers. In 2020 – amid a surging global pandemic – it’s the nightmare scenario.
“I suspect that we will see stores taking great pains to keep people safe and to dissuade people from cramming into stores (and) waiting outside together for doors to open,” Gov. Gretchen Whitmer said last week. “That’s just a recipe for disaster.”
While dine-in restaurants, movie theaters and more have been shuttered in Michigan during the latest surge of the pandemic, Whitmer’s team spared retailers – just as their most important season arrives.
Stores are limited to 30% capacity, by the latest state order. But nonetheless, they’ll be able to open their doors this Black Friday.
“This is one part of our economy we’ve kept open because we think it can be done safe,” Whitmer said. “And I hope everyone proves us right.”
How dangerous are stores?
The good news for retailers: Of Michigan’s 1,185 COVID-19 outbreaks tied to places, only 23 are tied to retailers. And all of those cases have been employees, not customers.
But that doesn’t mean the coronavirus isn’t spreading at stores, said Director of the Kent County Health Department Adam London.
COVID cases are surging so high, many counties can’t keep up with the contact tracing. And when the tracing does happen, it can be hard to tie an outbreak to something like a grocery store trip, London said.
“We ask (COVID positive) people, ‘Where have you been at in the past several days?’” London said. “Peoples’ recollection is fuzzy.”
But health experts agree – wherever people gather together, there’s an increased risk of COVID-19 transmission, London said. For those who still want to Black Friday shop this year, London says they should wear masks, leave places where people aren’t masking up, maintain distancing and keep up hand hygiene.
“I would say first and foremost, what can you do online?” London said. “Minimize your time. Get what you’re looking for – get in, get out.”
How retailers plan to cut down on risk – but not revenue
The holiday season is crucial to the bottom line for many retailers.
The origins of the name “Black Friday” come from the mid-to-late 1900s, as retailers sought to make up all of their losses from the year in one day – going from being “in the red” to “in the black.”
For many Michigan small businesses, up to 25% of their annual revenue comes from the holiday season, said Michigan Retailers Association spokeswoman Meegan Holland.
This holiday season is particularly daunting for businesses. High unemployment and job uncertainty means some don’t have the money to spend – or they might hold their wallet tighter if they predict a layoff is coming. A surging pandemic means some won’t want to shop at stores and others won’t buy gifts if they’re not planning to visit family.
The plan to get people to shop despite these deterrents is two-fold for retailers: Expand deals beyond Black Friday and create remote ways to shop.
These trends have already been in the works for years, said Deb Gabor, a brand expert, author and CEO of Sol Marketing. She’s calling this “the most unusual Black Friday in history.”
“If you go back five or 10 years, Black Friday was a time where people got together and they actually physically went to the stores in search of doorbusters. The whole thing was very experiential. Black Friday as a day is (becoming) less important to retailers than this eight-to-10-week period flanking the Christmas holiday.”
One example is, Meijer is extending its Black Friday deals to the entire week. The idea is, this dilutes when customers are in stores and reduces the likelihoods of crowds and COVID-19 transmission.
“What used to be a huge spike on Black Friday and Cyber Monday is going to get spread out,” said Ravi Anupindi, a professor at the University of Michigan’s Ross School of Business.
It’s a similar change in philosophy for Lynn Ross, who calls herself the “Boss Mama” at Mother and Earth Baby Boutique in Lansing.
“We’ve always focused on trying to get as many people in store as possible,” Ross said. “This year, obviously, we can’t and don’t want to encourage people to be rushing to the store for crazy deals.”
In other years, Mother and Earth offered better deals earlier in the morning on Black Friday. Now, the sales are the same all day long.
Online sales have become a staple of larger retailers, but haven’t been part of the business model for smaller businesses overwhelmed by the cost and complexity of it.
“The pandemic certainly taught a lot of businesses that they can no longer put off an e-commerce platform,” Holland said. She’s encouraging businesses to get at least three to five of their top-selling items online – it doesn’t have to be the entire inventory.
Mother and Earth is among the many Michigan businesses to recently invest in online sales. It’s helped the business make up for the revenue decline at the physical store during the pandemic, Ross said.
“We’ve had a website for many years, it’s just never really been a selling tool,” Ross said. “It’s been more of a tool to let customers know what we carry and try to get them into the store.”
Now, Ross’ customers can buy everything from toys to cloth diapers to face masks on its website.
And the change comes just in time – as a new Michigan State University study shows 43% of people plan to do most of their shopping online this holiday season, compared to 26% in 2019.
Online shopping is the reason the National Retail Federation is projecting a 3.6% to 5.2% increase in spending this holiday season compared to 2019, despite a pandemic. Of the projected $760 billion spent across the U.S., online and other non-store sales are expected to account for about $210 billion, a 20% to 30% increase from 2019.
The industry-wide shift to online is beginning to blur the lines between Black Friday and Cyber Monday, Gabor said.
But online sales aren’t the only option outside of brick-and-mortar shopping. Curbside pickup and delivery are also becoming popularized for retail this year – adopting the practice from restaurants.
Companies like Shipt – which offers same-day delivery from more than 100 retailers like Bed Bath and Beyond, Target and Petco – are gearing up for massive holiday demand. Shipt works with retailers to offer the same deals to its customers that they’d get at the store.
Shipt started the pandemic with 100,000 shoppers. It’s now expanding to 350,000, nationwide.
“We like to say that we bring the store to your door,” said Evangeline George, Shipt director of business communications.
The pandemic has thrust the industry five to 10 years into the future, George said. Shipt is anticipating masses of people will prefer to take advantage of Black Friday deals through the Shipt app this year instead of going in person.
In preparation, Shipt is giving its shoppers a $50 to $300 bonus, depending on how many trips they do this week.
“Whether customers are motivated by safety or convenience, the common thread is that they all want some extra help this holiday season,” George said.
What 2020′s altered Black Friday means for small businesses
Amazon and Walmart will be the big winners of the holiday season, without question – Gabor said.
But the new retail shopping paradigm could also benefit nimble small businesses that are ready to adapt, she said.
“We’re going to see the creativity of retailers really shine,” Gabor said.
Examples of ingenuity include small group appointment shopping, expanding shopping areas to the sidewalks and streets for more space and using Facebook Live to show off how your product works.
In Lansing, one new solution is “virtual window shopping.”
Here’s the plan: For the downtown’s vacant storefronts, the city is allowing businesses from outside downtown to come in and dress up the window display. The displays include a QR code or URL so customers can buy the products they see in the windows online.
Not only does it promote local businesses, but it also encourages safe shopping without a crowd and enhances “the cozy factor” of downtown by filling in the gaps of the vacant buildings, Holland said.
The pandemic has crushed many Michigan small businesses. Regardless of whether you’re shopping online or in person, Holland pleads with people to think local, first, when looking for gifts.
“What people spend now in their communities is going to make a huge difference as to how that community looks a year from now,” Holland said.