Get in and get out, if they even go in at all.
That will be the theme of this year’s holiday shopping season, as consumers shift even more to online shopping, curbside pickup and buying online for pickup in stores to avoid store crowds amid the COVID-19 pandemic, retail experts and local store owners said.
"We still think a lot of customers aren’t really going to come out and God forbid if there is another outbreak and another quarantine. … We’re ready for it online-wise. But we really hope that does not happen," said Steve Muñoz, who owns The Amazing Olive, a gourmet food gift shop, in Patchogue. His parents own a sister store in Port Jefferson.
Even with record amounts of online shopping expected during the holidays, this year’s recession and high unemployment rate will cut into gift buying.
"What it means is that retailers are really scrambling to get creative and be flexible to gain market share over their competitors," said James Bohnaker, associate director and economist in the Boston office of IHS Markit, a market information service headquartered in London.
Total holiday retail revenue is projected to increase 6.9% to $779 billion compared to last year, but the percentage changes in different categories will vary greatly, he said.
"For example, online retailers and home improvement stores should hope to surpass 2019 holiday sales by 15 to 20%, while department and clothing stores will be lucky if holiday sales are only 20% below last year’s mark," Bohnaker said.
The holiday retail season overall won't be horrible or great, considering that it will take place during a pandemic and that last year's holiday sales were weak, increasing only 4% to $616 billion from 2018, he said.
For consumers who are willing to spend, this holiday season will offer unprecedented discounts, said retail expert Burt Flickinger III, who founded Manhattan-based Strategic Resource Group and has studied Long Island retail.
One reason is that retailers have an excess of inventory after months of being closed due to government-mandated business shutdowns to help stop the spread of the virus, and back-to-school shopping took a big hit, he said.
"Retailers will be desperate to get rid of seven months of leftover merchandise in two months," he said.
Because of retailers offering deeper discounts and offering them earlier, holiday shopping will be spread out more throughout the three-month period, starting in October, retail experts said.
Walmart, Target, Best Buy and Macy’s all normally start their holiday sales around Black Friday and Cyber Monday but they launched them last week to compete with Amazon Prime Day.
Not only has the pandemic boosted online shopping to record levels, but it has caused a surge in curbside pickup, which will continue into the holiday season.
Half of consumers say they’ll use curbside pickup more this holiday season than they did last year, according to a poll of about 4,500 adults in August conducted by BlackFriday.com and Google Survey.
Also, 84% of respondents said that COVID-19 will directly impact at least one aspect of their holiday shopping, the survey found.
The pandemic has tilted the scales more in favor of retailers with higher credit quality, which tend to be large chains, such as Walmart and Costco, which were able to quickly expand their capacities for next-day deliveries, said Charlie O’Shea, lead retail analyst at Moody’s Corp., a Manhattan-based financial services company.
But many retailers will be desperate to drive sales and traffic, so they’ll make the mistake of chasing sales at the expense of their profit margins, he said.
"The toughest retail competitor … isn’t your stronger one. It’s your weaker one because he’s desperate," he said.
Newsday interviewed Long Island store owners and managers about how the pandemic has affected their operations this year and their holiday plans. Their responses have been paraphrased and edited for clarity and length.
The Amazing Olive
About the business: The gourmet food gift shop sells extra virgin olive oil, balsamic vinegar, herbs and spices.
Locations: Port Jefferson and Patchogue
Owner: Steve Muñoz (owns the Patchogue store)
Newsday: How significant is the holiday shopping season for The Amazing Olive?
Muñoz: It’s the busiest time of the year for us, with 30% to 40% of our business coming in November and December. We sell lots of gifts baskets for teachers and corporate presents.
Newsday: How has the pandemic changed your business?
Muñoz: Being able to sell products online during the pandemic, when our doors were shut for months, saved our business. So, we’re investing more in our e-commerce business. A few months ago, we started an update of our website to make it more user-friendly and cleaner, and we finished a few weeks ago. We also added an online loyalty program.
Another new feature we’re adding online is customized labels for products. Customers will be able to upload photos and design their own labels with messages, such as "Happy anniversary" or "Happy Hanukkah." We’ve always offered that feature to in-store customers but it wasn’t online before.
After COVID, we started making local deliveries personally. We still offer free shipping for online purchases of at least $50, and we expect that business to pick up.
Newsday: Are you worried that sales will be down this holiday season?
Muñoz: I’m only fearful that not enough people know about our website and that they can order online. People assume that mom-and-pop shops don’t offer e-commerce.
Normally, Port Jefferson’s annual Charles Dickens Festival, which offers live entertainment and other activities in December, draws a big crowd to the shops in the village. Due to COVID-19, that is canceled this year.
This has definitely been our toughest year but if this is the worst it gets, then we’re not going anywhere.
About the business: Headquartered in Plainview, Denny’s sells children’s and young adults’ clothing and accessories.
Locations: Nine stores, including five on Long Island
Owners: Founders Ron and Marilyn Klein and their sons, Jeffrey and Spencer
Newsday: How significant is the holiday season to Denny’s business?
Jeffrey Klein: The winter holiday season is normally our third-busiest time of year because we sell a lot of clothes for vacations, such as cruises and trips to Florida, the Bahamas and other warm places. With people not going away this year because of the pandemic, it’s going to be a huge void for something that we typically expect.
Newsday: In what other ways has the pandemic affected your business?
Jeffrey Klein: Our busiest time of year is normally March through May because we sell clothes and supplies for kids’ camps. But … sleep-away camps were canceled this year, which hurt our business a lot. The second-busiest time for us typically is August because of back-to-school shopping, but the pandemic affected that, too. Kids are not in school five days a week anymore, so they don’t need as much new clothing. Our business so far this year is down 44%.
Also, we decided not to reopen a small Denny’s store, in Englewood, New Jersey, when the pandemic restrictions were lifted in June.
It was already a slow-performing store before the pandemic. And since we have a store 15 minutes away in Paramus, New Jersey, we decided to permanently close the Englewood store in order to reduce overhead.
In addition, we're focusing more on online sales now.
Before COVID, only about 25% of our merchandise was available online. Now, 80% is online in order to give customers more opportunities to shop from home.
We also began offering curbside pickup and FaceTime shopping.
Newsday: What will you do differently this holiday season?
Jeffrey Klein: Everyone talks about Black Friday being the biggest shopping day of the year. We are going to be having promotions throughout November and December, starting after Election Day, so stores don’t get overcrowded.
We’re hoping for a good holiday season, especially since people haven’t shopped.
When it gets cold, people will need new jackets, whether there is school one day a week or five.
Fun Stuff Toys
About the business: The store sells well-known products, such as Barbies and Legos, as well as arts and crafts items, and science and technology-based merchandise, including robot kits, chemistry sets and Magna-Tiles magnetic building sets.
Owner: Michael Timko
Newsday: How significant is the holiday season to your business?
Timko: Christmas is the busiest time of year for us. But we’ve developed into a business that has other strong seasons, too, such as spring and summer. If we relied on Christmas alone, we probably wouldn’t survive. People are always going to buy for their kids. We try to make it fun here all the time, whether birthday shopping or spring holiday shopping.
Newsday: How has the pandemic changed how your store operates?
Timko: I’m finding that parents and grandparents are looking for games that kids don’t need electronic devices to play. They want to pull kids off those devices.
Also, we used to be a very hands-on store that encouraged customers to touch products before buying them. Now, we don’t do that as much. We have a very knowledgeable staff who makes recommendations to customers. Of my 12 employees, about half have been here at least five years.
Also, before the pandemic, only a small fraction of our merchandise was sold on our website. Now, 95% of the products are on our website, which has been revamped. We’ve also added product videos to the website for the first time.
We added curbside pickup service and expanded in-store pickup.
We also sent our holiday catalog out two weeks early this year to try to get people to shop early, especially those who are concerned about social distancing in a store.
Newsday: Are you worried that holiday sales will be down this year?
Timko: I think Christmas always comes. It’s just a matter of how it’s going to come this year that is the unknown. This has been the toughest year of business for me. But I’ve taken it as a challenge to change the way I do business.
About the business: The oldest garden center on Long Island, Hicks is a family-owned retailer that sells gardening tools, bird cages, pottery, patio furniture and plants. Hicks also is Long Island's largest Christmas store, selling ornaments, real and artificial trees, decorations and other holiday merchandise.
Vice president of operations: Nate Jackson
Newsday: What are some of the safety protocols that Hicks has in place because of the pandemic?
Jackson: We installed a counting system this spring to track the amount of people in the store … and have been using that tool all spring and summer to help gauge the optimal number of people. Keeping customers spaced and spread out is key. Luckily, we have an amazing, open-air facility that allows for tremendous air flow alleviating much of the risk in a closed room environment.
Newsday: How significant is the holiday season to Hicks’ overall sales?
Jackson: It represents a healthy portion of our annual sales. We are in the business of improving people’s homes and outdoor spaces which naturally revolves around spring and summer. Holidays are second to that period.
Newsday: When does Hicks usually put its holiday displays out?
Jackson: We start to merchandise holiday displays in mid-October to have something to show our fall customers. Our hope is to introduce those folks to the fact that we offer a wide breadth of holiday decor, so they keep us top of mind when thinking about seasonal decorating. This year has been especially successful in that we are seeing a lot of early interest in holiday home decorating.
We have the same timeline as other years but with fall sales being strong, we are flipping out merchandise sets [from fall to holiday] much quicker as we sell out.
Newsday: In what other ways has the pandemic affected Hicks?
Jackson: Our customers' focus is shifting back to the home and that means a revived interest in gardening. [That] is a nice trend that we hope survives beyond this period.
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