Recently, I told you how I thought many people would forego in-person holiday shopping this year, instead making their purchases online.
Last week, several large retailers including Target (TGT), Walmart (WMT), and Dick’s Sporting Goods (DKS) announced they would not open on Thanksgiving Day this year, for the first time in many years.
The announcement from Target summed up the situation very well. “Historically, deal hunting and holiday shopping can mean crowded events, and this isn’t a year for crowds.”
In addition to TGT, WMT, and DKS several other retailers have also announced that they will keep the doors closed, and customers and employees safe, this Thanksgiving.
I don’t know if you remember when these companies announced they would actually open on Thanksgiving Day, but I do. It was a big deal. There was a lot of debate around the sanctity of the holiday, but in the end shoppers showed up in person to grab deals.
And now that COVID-19 has necessitated the closure of these brick-and-mortar stalwarts on Thanksgiving Day. Well, that’s also a big deal.
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The National Retail Federation says that holiday shopping makes up 20% of annual retail sales each year. If any portion of that 20% shifts from your company to another, shall we say, unnamed, retailer (okay, yes, I’m talking about Amazon (AMZN)), that matters.
Brick-and-mortar retailers, like companies in almost every industry, must move quickly to retain sales in a preferred online environment.
Target has said one way they will address the issue is by “lengthening” the holiday season. Target will begin placing holiday prices on items in October, and is encouraging customers to download the Target app and join its loyalty program, driving customers to their online services to get special discounts.
The company is also making more products—20,000 judging by its announcement—available for curbside pickup and delivery. The company announced that its same-day delivery program, Shipt, grew 278% in the first quarter.
In its most recent earnings report, Target reported a 10.8% increase year-over-year in sales. The company said digital sales volume increased every month in the quarter, and at an accelerated pace: starting at 33% in February, and reaching 282% by April.
Target will need to continue to drive sales to its digital channels, as canceled in-person holiday sales negatively impact the brick-and-mortar model.
Walmart CEO John Furner tried to spin the Thanksgiving Day closing as a reward to employees who have “stepped up” during the pandemic, but the company is also well-positioned to endure this change.
The big box retailer was slightly ahead of the curve, having substantially ramped up its digital efforts well before the coronavirus outbreak. And The company had an early introduction to online retailing when it purchased Jet in 2016 for $3.3 billion. While Jet has basically been shut down, Walmart took the technology and integrated it into its own digital offerings to build out the current version of Walmart.com and the Walmart app.
Overall revenue rose 8.6% last quarter to about $135 billion at Walmart. Online sales grew 74% in the quarter. Much of that, not surprisingly, was pickup and delivery services sought by customers looking for ways to make purchases using contactless transactions.
Dick’s Sporting Goods has been a beneficiary of not only online sales, but the strong sales of outdoor sports and recreation equipment. This trend has also lifted smaller companies like Camping World (CWH) to new heights.
When Dick’s last reported earnings, the company said the pandemic had driven same-store sales down 30%; however, online sales spiked, growing 210% from the date the company closed its brick-and-mortar stores on March 18 through the end of the first quarter.
Dick’s CEO, Ed Stack, said the company will close its doors on Thanksgiving, to thank employees who have “have navigated this year with strength, commitment and care for each other and for our customers.”
