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Has COVID-19 Canceled Black Friday?

By Rich Duprey – Aug 2, 2020 at 2:45PM

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We won't be shopping for Christmas gifts this year the same way we used to.

While Christmas will still come for retailers this year, 2020 could be the year without Black Friday. The coronavirus pandemic has potentially killed off the tradition of Friday-after-Thanksgiving blowout retail sales that retained cultural significance even as the overall importance to the financial health of retailers faded.

If businesses want to survive the year, they need to make up for the lost time and money resulting from the shutdown this spring. So holiday sales are slated to begin earlier this year than ever before.

However, the real crushing blow to the traditional kickoff of the Christmas shopping season will be social distancing rules and store capacity limitations, which will mean we've probably seen the last of the crowd-trampling melees Black Friday sales events have come to represent.

Black Friday crowd at Target

Standing in line to get an early jump on doorbuster sales is likely to be a thing of the past. Image source: Target.

Holiday creep will become holiday leap

This year, it looks as if holiday sales will start in October. While some retailers have previously tried to shoehorn the season into back-to-school sales in September, that never really caught on. This year could be different.

Target (TGT 0.42%) recently announced it will launch its holiday sales in October and stretch them out through the season. "Historically, deal hunting and holiday shopping can mean crowded events, and this isn't a year for crowds," it said in a blog post.

Macy's (M 0.04%) CEO Jeff Gennette told analysts, "But when you think about a Black Friday, if you think about the 10 days before Christmas, what does that mean in terms of traffic if people are nervous about gathering with crowds?" He anticipates the real push will come after Halloween.

Yet retailers will face the added problem of having Amazon.com (AMZN 4.46%) move its annual Prime Day sales extravaganza into October. Because its website was swamped by demand for personal protective equipment and consumer basics, the e-commerce giant has tentatively scheduled the first week of October for its kickoff.

A holiday for family again

The pandemic is also causing retailers to abandon opening on Thanksgiving Day. While that trend began in earnest a few years ago, after a quirk of the calendar meant there were six fewer shopping days between Black Friday and Christmas, retailers maintained the practice because it helped juice sales.

While there could be an argument for doing so again this year, retailers are announcing they will remain closed on the Thanksgiving holiday this year to limit crowds. Walmart (WMT -0.36%) said it will have regular hours the Wednesday before Thanksgiving, will close for the holiday, and then will resume normal hours on Black Friday.

Best Buy said it will close on Thanksgiving Day too, as has Dick's Sporting Goods, Kohl's, and Target.

The great migration

In reality, the cultural weight of Black Friday may be too hard to ignore, so rather than in-store sales, we may see the crowds migrate online.

Last year, a record 190 million people shopped online during the four-day Thanksgiving Day-to-Cyber Monday weekend, according to the National Retail Federation, some 14% more than in 2018. And more importantly, they spent 16% more money online last year, spending on average almost $362 each, compared with the $313 they spent the year before.

Notably, last year was also the first time Black Friday topped Cyber Monday as the busiest day for e-commerce, with 93 million people shopping online that Thursday, compared with the 84 million who shopped online the following Monday.

Gone but not forgotten

Retailers may lean heavily into e-commerce this year, pushing more of their customers to visit their websites instead of their stores, which they may have already planned on doing anyway.

In a way, the retail industry is better prepared for the online onslaught this year because online ordering and curbside pickup became a necessity during the pandemic. As Macy's Gennette said, "Curbside pickup is going to be a big secret weapon for us this holiday season that we didn't have last holiday season."

Black Friday as we knew it may be gone for good because of COVID-19, but retail stores may keep it alive online as the unofficial start to the holiday shopping season.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Macy's Stock Quote
Macy's
M
$23.50 (0.04%) $0.01
Amazon.com Stock Quote
Amazon.com
AMZN
$96.54 (4.46%) $4.12
Walmart Stock Quote
Walmart
WMT
$152.42 (-0.36%) $0.55
Target Stock Quote
Target
TGT
$167.07 (0.42%) $0.70
Best Buy Stock Quote
Best Buy
BBY
$85.30 (1.35%) $1.14
Kohl's Stock Quote
Kohl's
KSS
$32.08 (-0.99%) $0.32
Dick's Sporting Goods Stock Quote
Dick's Sporting Goods
DKS
$119.58 (1.27%) $1.50

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