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The holiday season is always a crucial time of year for retailers. But with the added financial strain of the pandemic, it’s more important than ever that business owners think creatively to maximize sales while keeping shoppers and employees safe. 

If you have a small brick-and-mortar shop, you’ll likely face fluctuating in-store traffic and unpredictable consumer demand over the next few months. The key to a profitable holiday season is, at least in part, how well you prepare for and respond to these challenges.

Here we discuss retail trends and predictions for the upcoming holiday season, as well as a few ways you can bolster sales, create repeat customers, and minimize virus transmission in your place of business.

Holiday Spending in 2020

All signs point to an unusual, possibly difficult fourth quarter for small retailers. High unemployment rates, Covid-related anxiety, and a heightened focus on saving may reduce what the average consumer is able or willing to spend this season.

However, there is still room for (cautious) optimism. According to a recent Visa Back to Business study, 60 percent of American shoppers say they will look to local retailers this holiday season. And some consumers may have more money to spend on tangible goods in lieu of holiday travel, concerts, restaurant spending, and other activities cut off or limited by the pandemic.

While these predictions aren’t set in stone, one thing is fairly certain: much shopping activity will continue to take place online. Having a strong digital presence for your brick-and-mortar business could be vital, both throughout the holiday season and thereafter.

When will shopping begin?

Many shoppers and retailers might get an early start. This is due in large part to several big-box stores—such as Target—announcing they’ll begin their holiday promotions earlier and extend the sales over longer periods of time to allow for social distancing.

Additionally, consumers wary of shipping delays or gaps in inventory may be motivated to complete their shopping well in advance of the holiday rush.

Will there still be a Black Friday rush?

Retailers should expect reduced in-person shopping on Black Friday (compared to previous years). The CDC recently issued new guidance warning Americans to avoid higher-risk shopping situations, such as standing in Black Friday lines.

That said, some merchants—such as cosmetics retailers—still expect to see a nearly 30 percent increase in sales on Black Friday, according to Greg Lisiewski, vice president of Global Pay Later at PayPal.

Store owners and management generally should also still plan for the possibility of increased foot traffic on Black Friday, and think about how to ensure social distancing.

How much will people spend?

Many will spend less than they did last year, but some individuals may be looking to spend more on tangible goods. In an August survey of 1,500 consumers by the consulting firm Accenture, 2 out of 5 shoppers stated they were planning to reduce their 2020 holiday spending. On average, respondents said they would spend $540—a $100 drop from last year.

A recent study by Deloitte presents two possibilities:

  1. In the first, consumers remain anxious about their finances and spend conservatively during the holidays, focusing on saving instead. This results in a modest 0-to-1 percent year-over-year sales increase for retailers.
  2. In the second, consumer confidence grows, and individuals with surplus income (money that they aren’t spending on restaurants, travel, etc.) direct their spending towards tangible goods. In this scenario, retailers can expect to see a jump of 2.5 to 3.5 percent year-over-year sales growth.

Note, however, that both of these sales projections are lower than those of years past.

How much shopping will take place online?

The aforementioned Deloitte study predicts e-commerce sales will surge over the holidays.

Digital transactions could increase by roughly 25 to 35 percent from November to January, totaling between $182 billion and $196 billion in sales. By comparison, e-commerce sales increased by 14.7 percent in 2019.

Making the Most of the Holiday Rush

From increasing their online visibility to offering curbside pickup, brick-and-mortar businesses are taking steps to ensure this atypical holiday season goes smoothly.

Here are a few areas worth focusing on.

Protect the health and safety of your customers

As business begins to pick up over the holidays, health and safety should remain paramount. You can encourage social distancing and reduce the chances of Covid-19 transmission in a number of ways:

  • Make it easy to pay digitally (cashless payments).
  • Extend business hours to reduce crowding (and offer alternative hours for at-risk shoppers).
  • Implement and promote curbside pickup.
  • Promote mask-wearing and set up a hand sanitizing station at the entrance to your store.
  • Make sure employees have adequate PPE (such as plastic barriers, gloves and masks).
  • Display inventory in such a way that allows for good “flow-through” of foot traffic in your store.
  • Limit the number of people allowed in the store at one time, and increase ventilation as much as possible.
  • Set expectations with customers through Google My Business Covid-19 updates, information on your store website, and signage at the entrance and throughout your business.

Focus on your employees’ well-being

Be sure to prioritize staff safety and comfort through what could be a hectic season. Minimize the risk of Covid-19-related workplace violence by letting customers know what to expect before they enter your store. If time and resources allow, provide employees with conflict-resolution training, and identify a safe area they can retreat to if they feel threatened.

In addition to improving employee well-being, demonstrating sensitivity and care to your staff members may actually help boost sales. The Accenture Holiday Shopping Survey (the same study referenced earlier) found that 57 percent of consumers would be motivated to shop with retailers that were committed to treating their employees well.

Increase online engagement

Shopping online will be the norm this holiday season, but this doesn’t necessarily mean that brick-and-mortar businesses have to miss out.

In fact, small retailers with a strong online presence will be uniquely poised to meet consumer demand for locally-made goods and fast fulfillment as the holidays approach. By providing the option of online purchasing—combined with in-store or curbside pick-up—you can make it easier for your customers to shop safely while avoiding long shipping times.

Before and throughout the holiday season, you’ll want to do all you can to strengthen your online presence. This may mean creating unique promotions, offering online gift certificates, improving your website or making sure your customers can find you on their favorite platforms (such as Instagram or Facebook Marketplace).

All of these actions could help to bolster sales—but only if you keep a good eye on inventory. Make sure your website stays up-to-date and accurate in its descriptions of what’s available in your store, and over-communicate about any possible shipping delays

About the Author(s)

 Drake  Forester

Drake Forester writes extensively about small business issues and specializes in translating complex legalese into language everyone can understand. His writing has been featured on Fox Small Business, AllBusiness.com, Score.org and many other websites and blogs.

Legal Strategy Officer, Northwest Registered Agent
woman holds presents while walking down street wearing mask