Categories: Retail

CDC’s New Guidance Will Do Little To Boost Brick-and-Mortar Holiday Shopping

The U.S. Centers for Disease Control and Prevention’s guidelines when it comes to celebrating and preparing for the COVID era’s holiday shopping season can be summed up in a single sentence: Keep away from crowds.

The CDC this week offered guidance for how Americans should navigate the holidays in terms of COVID-19 safety, and perhaps unsurprisingly, Black Friday shopping in crowded stores is discouraged. So is attending parades or going to crowded parties. Instead, the agency recommends shopping online and attending smaller, socially distanced holiday gatherings, or virtual ones via online chatting tools.

Adapting to a New Reality

What does that mean for the year’s most festive and commerce-heavy period, with Halloween, Thanksgiving, Hanukkah, Christmas, New Year’s Eve and more all happening in a roughly 12-week timeframe?

As has been the case for many things during the pandemic, events surrounding many of those holidays can shift. For instance, Black Friday might not be entirely canceled this year, but plenty of brick-and-mortar retailers have signaled that it’s not a main focus or something they’re investing in to draw big crowds.

In fact, many retailers’ announcements seem to highlight efforts to draw consumers away from Black Friday physical shopping. Amazon, Target, Best Buy, Walmart and other big chains are actively moving to push their holiday sales into the market in October.

Amazon has also shifted its annual Prime Day from its usual July to Oct. 13-14, which pushed Target to announce its own Deal Days for the same time period.

The Casualties of Consumers’ Safety Concerns

But for activities that can’t shift online – like holiday vacations or Christmas Day movie premieres – the season is shaping up to be a rough road.

It’s already been a bad week for announced layoffs in travel and tourism. Airlines warned that they expect to cut some 35,000 U.S. jobs on Oct. 1 unless Congress passes a new round of a COVID-19 aid.

That was followed by word that Walt Disney Co. is laying off 28,000 employees as a result of Disneyland’s ongoing closures and incredibly diminished traffic at Disney World. Josh D’Amaro, head of parks at Disney, noted that the pandemic had forced the company to make “difficult decisions” as it attempts to weather the ongoing storm.

Meanwhile, U.S. cinemas have been hit hard by consumers' unwillingness to return as theaters have been slowly reopening over the past several weeks. The industry is “not going to recover fully until consumers are confident that they won’t die if they go to the movies,” Michael Pachter, an analyst at Wedbush, told CNBC. “That means no return to normal until there is a vaccine widely available, likely not until April to July 2021.”

Thus far, the larger chains have secured enough capital to stay solvent until next year, but CNBC noted that AMC Entertainment has confirmed that minus a big turnaround or a new debt deal, it’s at risk of going bankrupt.

“Over the next 12 to 24 months, there are going to be a lot of bankruptcies,” Brent Turman, president of the Texas Association of Motion Media Professionals, told the network. “A lot of companies have weathered the storm so far, but I think we all know the storm isn’t over.”

Not over, and liable to hit certain firms harder than others. Disneyland and Disney World’s problems might hurt Walt Disney Co, but the company’s new Disney+ streaming service has grown like gangbusters during the pandemic. Smaller amusement park operators don’t have that to fall back on.

Similarly, smaller movie theater operators have far fewer choices when it comes to securing capital to ride out the storm. If consumers aren’t of a mind to come back soon, what hits the top of the food chain hard will hit the bottom of the food chain harder.

Overcoming Consumers’ Reluctance

The CDC’s latest recommendation will likely do little to spur consumers to get back into the world of physical commerce, insofar as it explicitly suggested they avoid doing so.

PYMNTS’ most recent survey indicates that consumers are likely to heed that suggestion. The majority of respondents have already reoriented their shopping habits online and are showing decreasing interest in returning to their pre-pandemic routines.

And they expect on average that the pandemic will go on for another 11 months. They won’t count it as over until there’s a vaccine or treatment in wide circulation.

And while a sizable portion of those surveyed expressed a willingness to travel and re-engage if they get an all-clear from the CDC, the agency is obviously quite far from giving that.

The bottom line: Consumers will shop this holiday season – but if something has to be bought or experienced in person, the demand just isn’t there.

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.