As December ushers in the continuation of the holiday shopping season, uncertainty continues to grow in the brick-and-mortar world of retail amid an economically crippling pandemic, leaving many to wonder what the e-commerce success rate of this year’s Black Friday could mean for its future.

For years, the holiday shopping season has revolved around the Black Friday event, and Black Friday has been regarded as America’s busiest shopping day of the year. With retailers across the country offering highly discounted prices, it is little wonder that millions of Americans queued up in long lines at their favorite stores so that they could purchase items at low prices.

This year, many retailers began to advertise those deals as early as October and offered many of them online, reflecting both the challenges that physical stores are facing and the sudden shift in how consumers prefer to shop.

Amid a harrowing pandemic that left many financially and physically disenfranchised, Black Friday looked different for both American retailers and consumers. For one thing, the long queues and crowded stores that once characterized the shopping event were replaced by online shopping. Furthermore, this year’s online Black Friday shopping was the second-largest online spending day in U.S. history, coming in behind 2019’s Cyber Monday. This surge can be credited to the pandemic’s impact as American shoppers chose to skip crowded stores and malls to shop instead from the comfort of their homes.

Data obtained from Sensormatic Solutions revealed that in-store traffic on Black Friday fell by about 52.1% compared to last year’s in-store shopping traffic. In other data obtained from Adobe, consumers spent roughly $9 billion shopping online this year, which shows that millions of American shoppers were still willing to shop despite the pandemic’s blow to the country’s economy.

Sheryl Thomas, a photographer from Grand Rapids, Michigan, said her Black Friday was different this year compared to others before it.

“I chose to do my Christmas shopping online this Black Friday because with everything that has been going on, you just never know,” said Thomas. “It was less stressful to be able to shop online this year, and I don’t believe that I missed out on much of the fun because I read and saw in the news that people who shopped in stores this year were very scarce.”

The coronavirus instilled in many American shoppers a heightened sense of discomfort and anxiety about going into stores. Most retail chains across the country who predicted the outcome promptly moved their doorbuster deals online to allow people to shop more safely. Even the Center for Disease Control and Prevention urged consumers to shop online, use curbside pickup, and favor open-air shopping centers over enclosed shopping areas.

Almeffa Vengerko, a store manager at Nordstrom in Chicago, Illinois, said that although the company had strategically placed many of its deals online, store-traffic was low and the shoppers who did stop by were there to pick up the items that they had purchased online.

“There were a lot of people shopping on our online platform and then stopping by to pick their items either in-store or through our curbside pick up service,” said Vengerko. “Another part of our strategy for Black Friday was to price-match a lot of the items because with the pandemic going on, no one knew what to expect.”

According to a preliminary survey conducted by Sensormatic Solutions in October, the forecast revealed that retail stores’ traffic would be down by 22% to 25% during the critical weeks of the holiday shopping season, and its estimation was accurate due to the amount of traffic that stores received on Black Friday.

Robin Sanchez, a Macy’s store manager in Grand Rapids, Michigan, said that to meet up with sales numbers and expectations, Macy’s and many other stores like it had to start their Black Friday promos earlier than usual.

“Nationwide with retail, this year was very different because many retailers started offering their deals way earlier than usual,” said Sanchez. “I’d say we started marketing and promoting our Black Friday sales weeks before the actual day, and I think it went a long way in terms of being an effective strategy.”

Sanchez also said that although executing this strategy meant that there were no lines at the door on the day of  Black Friday itself, the store still managed to churn a profit.

“There were no long lines through the store and around the building this year because people didn’t feel the same sense of urgency that they have felt in previous years, and that is partly due to the pandemic, but as a store, we did not do too badly,” said Sanchez.

Although Black Friday this year was an online success for many large stores and for e-commerce in general, some people still have their reservations about the durability of retail businesses moving forward. .

Andy Wu, an Assistant Professor of Business Administration in the Strategy Unit at Harvard Business School, has a lot to say about where the busiest shopping day of the year is headed in the near future.

As we look to the future, consumer demand for goods will look a lot different, making inventory planning more complex than what it was before. Recently, many companies have had to gauge in real-time what people are spending their money on and the frequency at which they are spending it.

Wu also said that in the months following Black Friday, a dwindling in sales  could have a negative effect at brick and mortar stores, especially for smaller retailers. 

“Keep in mind that the smaller retailers are the ones that we generally think of as being more brick and mortar locations,” said Wu. “There’s obviously another category of smaller retailers that are purely e-commerce retailers. That is a different story. I think there’s evidence that perhaps those businesses are doing reasonably well, but it’s hard to say right now.”

Nationwide, retailers have experienced an abrupt split in fortunes during the pandemic. The extensive shutdowns that happened earlier this spring triggered big-brand bankruptcies and many other store closures. Strong e-commerce sites like Amazon and Walmart have only gotten stronger, exceedingly competent and more profitable because of their ability to rapidly provide the necessities that people need while stuck at home.

According to data gathered by the National Retail Federation, about 59% of shoppers commenced their holiday shopping by early November, and most of that shopping occurred online. This year, early signs of the surplus in digital sales were caught by Adobe Analytics, which scans through about 80 %t of online transactions across the top 100 U.S. online retailers. The data reflected that consumers spent upwards of around $5.1 billion online this past Thanksgiving  Day, compared to the $4.2 billion dollars that were spent around the shopping holiday season last year. 

Looking back on Black Friday’s profit trend this year, it is economically notable that many Americans, on the whole, spent more than they did this year than they did last year, despite the loss of over 22 million jobs nationwide  and the effect that it had on many American households as a whole. Because of the pandemic, the retail industry has rapidly adjusted to meet the heavy consumer demands that American shoppers have, especially this holiday season, thereby abruptly converting traditional department stores into fulfillment centers, building new warehouses, hiring thousands of workers to fill e-commerce roles, and extending or adding curbside pickup service which was a successful trend this Black Friday.

Forces driving online shopping forward were set in full motion a long time before the pandemic progressed and continued to expand. Either way, gauging the decline of many brick-and-mortar retail stores in comparison to the simultaneous growth of e-commerce shopping in the past eight months is like watching the retail sector’s evolution move in fast forward. In the near future, the end of 2020 and then the beginning and progression of 2021 will be seen as a significant turning point for the retail sector.

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The days of big department stores with glittering windows and endless racks of product may be slowly coming to end. With a few clicks on a mobile phone, consumers can browse, buy, and ship the same product that could take several hours to find in a store. In the face of this digital boom, brick and mortar stores must find new and intriguing ways to bring customers through the door.

“Given the situation, it may be tempting to cue the Don McLean background music, all the while singing, 2018 is the year retail died!” wrote Jon Croy, CEO and co-founder of Point Inside. “But don’t sound the alarm just yet. There is hope for retailers who are willing to adapt to and embrace the many changes that have evolved consumers’ shopping experience.”

In spite of the closing of approximately 3,800 stores across the United States this year, in New Jersey, development is happening. Triple Five WorldWide, owners of the two largest malls in America, has plans to open a new mall in 2019.

This mall, called “American Dream,” is over 3 million square feet and will take a new approach to shopping as we know it. In an interview with WWD Studios, President and CEO Don Ghermezian described this destination as “unrivaled.”

“American Dream is a curated and thoughtfully designed blend of new-to-market retail, unprecedented entertainment, attractions, world-class dining and culinary experiences, artfully presented in an architecturally exciting and elegant environment like no other,” said Ghermezian.

Just under 5 miles from Manhattan, American Dream is set to be be 55% entertainment and 45% retail, with more than 100 dining options. Entertainment includes a ski park, a water park, a theme park, and more.

At the same time as this massive mega-mall is going up, some giants of retail are going down. Toys ‘R’ Us, Sears, JCPenney, and, most recently, New York City’s iconic Lord & Taylor on 5th Avenue are closing and downsizing on a massive scale.

HBC, parent company of Lord & Taylor, issued a press release in October of 2017 announcing the sale of the flagship store to WeWork Companies. The plan was for WeWork to take over the top floors of the building, but allow Lord & Taylor to keep 150,000 feet for a smaller store on the street level.

“Our partnership with the WeWork team creates new opportunities for HBC to redefine the traditional department store by extending those communities and drive additional traffic to our stores, particularly as we add co-working and community space to existing, vibrant retail locations” said Baker.  

But that is no longer the case. Lord & Taylor now plans to close the entire storefront and leave its 5th Avenue home of 104 years for good.

New York City’s iconic Lord and Taylor on 5th Avenue is closing early in 2019. As the holiday season comes to a close, shoppers are scavenging through what is left in the store. Photo by Samantha Springer.

Lord & Taylor is not the only department store in trouble. Sears Holdings Corporation filed for Chapter 11 Bankruptcy in October and announced they will be closing 188 unprofitable KMart and Sears stores by the end of the year.

Macy’s has also taken a body blow. They have closed 81 brick and mortar stores.

This decline has been attributed, in part, to the rise in online shopping.

Since 2010, E-commerce sales in the United States have more than doubled. A report from the Census Bureau states that total E-commerce sales were less than $170 billion in 2010; by 2016 that number had reached just under $390 billion.

The ease of online shopping is a huge driving factor in this uptick.

Emma Manning is an associate of Marketing and Partnerships at Rank & Style, a media site that publishes daily “Top 10” lists in fashion, beauty, and lifestyle. Though the company is relatively new, their site is seeing approximately 14 million viewers per month. Manning attributes this to the time saving service they are providing their visitors.

“With Rank & Style, our readers come to us because they are typically busy, working adults or mothers, who just don’t have the time in their week to go in-store and purchase new items” said Manning.  

Another big consumer draw to online shopping is that you can usually find what you’re looking for.

Ramon Garcia wanted to do his Black Friday shopping in person this year. Even though the online marketplace offered the same discount as the store, Garcia Ramon made the trek to look for his Sonos Beam, but was forced to walk away empty-handed.

Even with what seems to be the upper-hand, this digital boom may not be responsible for the apparent decline in brick and mortar stores. Less than 10% of all retail sales in the 3rd Quarter of 2018 were a direct result of online shopping.

Despite the impending doom of major staples of American commerce, not everyone has lost hope. The success of the mega-mall, American Dream, remains to be seen. But in the meantime, smaller brick and mortar stores may still be able to cash in on customer experience.

In an article for Forbes, market researcher Pamela Danziger said, “The human element in retail is the most important factor in attracting customers and driving sales in-store, not product.”

Stephen Choi, a longtime resident of New York, doesn’t need a waterpark to enjoy the experience of shopping in a store. He likes to be in the moment, surrounded by other people in the same state of mind, and to see and feel the things he may buy.

“I love the buzz,” said Choi. “I love the hustle and the bustle. I like people around me, and it feels like a holiday.”

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