What should be the most wonderful time of the year for retailers might not be so for those already facing flagging sales. One might assume the holiday shopping season is probably when suffering retailers have the best shot at recovery, but that's not necessarily true in a world in which online shopping is luring customers out of the stores and into their armchairs, where great deals are just a smartphone click away.

Recent reporting from ShopperTrak research showed a 6.2% decrease in in-store traffic at retailers on Black Friday. And CNBC, citing Adobe Analytics data, reported online sales on Cyber Monday reached a record $9.4 billion.

What this means is that online retailers like Amazon (NASDAQ:AMZN) and brick-and-mortar shops with a strong online presence, such as Nordstrom, might become Dr. Seuss's Grinch Who Stole Christmas for other, more traditional retailers. Those at risk include Macy's (NYSE:M), Kohl's (NYSE:KSS), and J.C. Penney (NYSE:JCP).

Clothing on hangers in a store.

IMAGE SOURCE: GETTY IMAGES.

Weak mall performance

Last month, Macy's reported a decline in quarterly same-store sales -- the first in nearly two years -- and cut its annual sales and profit forecast. The company said weak performance at some shopping malls and work on the store's website were partially responsible.

The message from Kohl's was similar. The company cut its full-year profit forecast and reported a decline in total revenue for the quarter. On the earnings conference call, Kohl's CEO Michelle Gass mentioned seeing a "heightened promotional environment" in the quarter and plans on keeping up with competitors in order to win over customers. The question here is: How will that strategy impact earnings?

For J.C. Penney, the quarterly loss came in narrower than expected, pushing shares higher the day of the report, but sales continued to decline. The embattled retailer's shares have fallen to as low as about $0.57 a share this year, and at one point, when the shares traded at less than a dollar for 30 consecutive days, the company was at risk of being delisted from the New York Stock Exchange. J.C. Penney has reported negative earnings per share for the past three quarters.

Keeping up with e-commerce

Macy's, Kohl's, and J.C. Penney are in on the online game. The problem is, on top of their struggles to revive sales, they face the challenges of online giant Amazon growing its fashion business and brands such as Nike pushing sales of its products through its own website. Keeping up with the growth of e-commerce is another challenge. These days, e-commerce makes up more than a third of all clothing sales, according to Internet Retailer's 2019 Online Apparel Report, and U.S. online apparel sales expanded 18.5% last year, while total apparel sales grew only 5.3%. Coresight data shows that Amazon became the No. 1 apparel retailer in the U.S. this year.

To make matters worse for struggling brick-and-mortar shops that focus on apparel, clothing isn't necessarily the most popular purchase option around the holidays. Gift cards top consumers' wish lists, followed by money, while clothing takes the third spot, research by Statista shows.

In spite of the challenges, it is tempting to see an inexpensive entry point when looking at the companies' valuations and share performance this year. Macy's trades at 4.9 times earnings, and the shares are down 48% for the year, while Kohl's trades at 11 times earnings, and the stock is lower 31% YTD. As for J.C. Penney, the company's loss means it doesn't have a price-to-earnings ratio. The shares, though slightly down this year, have almost doubled from their August low point to reach $1.15 a share.

In spite of the low valuations and possibility of share price recovery, this holiday season isn't necessarily the time to invest in struggling brick-and-mortar names. If data so far is indicative of the entire season, those strongest online may come out on top, leaving little room for more traditional retailers to shine. Instead, it's time to monitor how Macy's, Kohl's, and J.C. Penney fare against the online competition. If they can carve out a place in the market for themselves this season, investors might think of adding these names to their shopping lists after the New Year.