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What the Holidays Mean for Retail in 2021

The pandemic and its devastation of lives and livelihoods presented retail with one of its roughest years in more than a decade. Toward the end of 2020, retailers of all sizes had made important changes to they way they do business, which helped them eke out what amounts to a not-bad holiday season.

Even mom-and-pop stores began offering additional fulfillment services like curbside pickup, BOPIS and home delivery, while big boxes like Target and Walmart, which were fairly well down that path already, were well prepared to help customers shop despite the pandemic. Those retailers were also helped earlier in the year by their designation as “essential” retailers, which allowed them to stay open while department stores and most specialty retailers were forced to close.

Some sales that might normally be counted as seasonal were pushed into the third quarter, as many retailers, leery of expected shipping delays due to higher online sales, coaxed customers to start shopping in October. In all, retailers in the cohort tracked monthly by Retail Dive notched surprisingly robust sales in November (up 10.3% year over year) and December (up 6.7%), despite the fact that the pandemic was re-surging and funds from a federal relief package earlier in the year were running out.

- Digital Partner -

“After a year of disruption and chaos, retail ended 2020 on a surprisingly high note,” GlobalData Managing Director Neil Saunders said in emailed comments. “From our data it is clear that savings made on things like travel and vacations were funneled into retail as consumers were determined to enjoy themselves and loosened the purse strings over the holiday season.”

Holiday spending
Throughout the year, consumer spending reflected the situation forced on them by the pandemic, and that affected holiday results.

Because so many people stayed home for both work and play, sales of items like furniture, home goods and electronics that made life more pleasant surged throughout the year. By the holidays, that meant that electronics, usually a seasonal mainstay, weren’t on the gift list — sending sales down 10.2% in November and 15.7% in December.

By contrast, sales of apparel, except for comfy clothes like sweats and athleisure, were hit hard throughout 2020, including at the holidays, and aren’t likely to recover much this year, some analysts say. In March, apparel sales fell 52.5%, in April they plunged 89% and in May they were down 63.7%. In subsequent months that moderated, though the declines would be considered significant in any other year: June down 25%, July down 19.9%, August down 23.7%, September down 13.1%, October down 12.1%. While the holidays usually give apparel a bump, sales were down 19.9% in November and 13.9% in December.

Still, the tough lessons in inventory management drilled into retailers by the pandemic held an upside, as many were able to sell less, but make more money. That could continue this year and beyond, as some clothing trends continue even after things return to normal… Retail Dive

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