Retailers get creative to reinvent holiday shopping amid COVID-19 pandemic


We begin today's program with the retail industry because black Friday it believe or not, it's right around the corner and for more, let's bring in Bloomberg intelligence consumer analyst William Doyle. Always a pleasure to talk to you pulling him. You always said you're the one who always goes out to the Friday morning after Thanksgiving and stands in the malls and kind of takes the pulse of consumers out there. How is Black Friday with this the first black Friday of the pandemic? How are things gonna look different? Yes, the first and I really hope the last It's going to be very different. You know, people are still very hesitant to go to stores, Retailers are shifting their promotions online. Typical doorbuster deals that you would see. You know, hundreds of people line up for are not going to be there anymore because the story's can't allow as much traffic into them. So this year, and I'll be probably roaming parking lots and maybe going into the stories depending on how the virus looks and then really checking online. I mean, we've seen retailers promote black Friday deals much earlier this year, in fact, even phasing them out over multiple days to get consumers interested in new promotions on a day to day basis. It was a lot of people out of work. I wonder if There's just gonna be the spending power there on the part of the American consumer. Yet the American consumer we think still has the appetite to spend. What we're really seeing is spending shifts. So if you think about last year on Divan the years before we had seen with people had gone away from buying gifts that you can wrap in a box to experiences so whether it was a restaurant gift check or whether the spa package or whether it was A travel package. It was more based on experiences this here with all that being limited and really something that you know people are shying away from its going to focus back on gifts. And that's a positive for the retailers that I cover the shift online. Remind everybody it's ah, in terms of the margins for the retailers. It's tougher because what you're gonna pay for shipping, right? Yeah, you do. I mean, Yeah, You're absolutely right. Shipping costs are up, and not only is it just because of the higher penetration that we're going to see across the board but also carry a rate has been rising and there are surcharges given the high in demand of expected over holiday. That's that, though for those retailers have brick and mortar locations. They've done a fantastic job at rolling out curbside pick up this year, and we think that can help alleviate some of those shipping costs. Not all but definitely some and the other thing I say about margins you know, going into the holiday season is inventory. What we've heard from the retailers over the past week is inventory is very lean across the retail landscape. So if anything, we think merchandise margins will be better and sales. You know, retailers may be giving up some sales because they won't be able to treat into the demand. If demand does accelerate, uncertain products or categories, Okay, lean inventory, because was it a supply chain thing? Well, these just stop in ordering as much all years since the start of the pandemic in March, when they slashed orders. As much as 50% or more. They've been slow to pick up that piece. Given the uncertainty around dependent IQ, so inventories are relatively low. What did we learn so far from the earnings that we did get? We learned that sales, you know online continue to remain strong up double digits. We learned that story. Sales are still weak but are improving. Retailers have crushed black Friday earlier, so some of them like Macy's had said that they had seen Holiday, a gift purchases moving in talked over, which helped three Q at the expensive for Q. We've also learned that it's going to be very uncertain Holiday period. You know, Black Friday is this week and retailers while they're pushing for our mind fills it won't be like ever before.

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