Better vs. Bigger: The Future of Black Friday

The holiday shopping season in 2020 will be like no other in recent history. The COVID-19 pandemic has thrown many social norms out of their place and accelerated new trends, exacerbating the weaknesses in retail. Retailers must have an integrated, seamless omnichannel offering in order to survive. They also need to be agile in the face continuous uncertainty.

Brick-and-mortar stores faced many challenges long before COVID-19 was introduced in the first quarter of 2019. These challenges combined posed slow-burning but serious threats. As e-commerce became more popular, retail footfall declined steadily from 2018 to 2019. ShopperTrak data shows a rise in foot traffic. This is based on the COVID-19 safety precautions being taken in each state. Online shopping has made “going to the shops” more difficult, costly, and burdensome. Online retail has made prices, as well as margins and markups, more transparent for consumers. The increasing number of abandoned malls and Main Streets in trouble have been indicators of consumer buying behavior.

Retail experts predict that the holiday selling season may begin earlier than usual, with consumers looking to shop before the masses. Brick-and-mortar stores won’t have an easier time following state and city closing guidelines during a pandemic. My teenage daughter and I went shopping in a New Jersey mall recently. The shopkeepers were very happy to have us there! We went to Staten Island’s local mall two days later and found a closed store.

Retailers should accept the demands of the pandemic and use this opportunity to invent as they approach holiday season. Black Friday was a declining holiday, and deals extended into Cyber Monday. Although it will likely remain an important part of the commercial calendar for many years, Black Friday seems to have reached its natural level last year.

There is some hope this year that the date will be the start of economic recovery. However, it must not be a second wave COVID-19 and confidence does not improve. Although the stock market is now recovering from March’s slump, many are still uncertain about the state of the economy. Recent unemployment rates are at 8 percent. A potential obstacle to a strong holiday season could be Washington, D.C.’s impasse over extending additional unemployment compensation to U.S. citizens.

 

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While consumers may feel nostalgic for Black Friday, retailers will likely have mixed feelings. Black Friday can be a margin-saving opportunity in the lead up to Christmas. However, many retailers feel forced to participate because they are in a sort of prisoner’s dilemma between their competitors. Black Friday’s upside can be much smaller than it appears. Our clients have reported that up to 45 percent is lost revenue from Black Friday, due to the events occurring in the weeks preceding and following.

Although no one can predict the size of Black Friday this year, we expect more variation. While some retailers might choose to “sit it out,” others will attempt to make up the difference and increase their revenue targets. The role of inventory will be crucial. Non-food retailers might have stock left over from earlier in the year while others may have already reduced orders. The outcome of each situation will be different. Only time will tell how this year will impact the future Black Friday.

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Source: https://www.mytotalretail.com/article/better-vs-bigger-examining-the-future-of-black-friday/

Walmart Annulles Robotics Contract and Bets on Human Workers

Walmart has ended its relationship with Bossa Nova Robotics. This company made robots that scan shelves to find inventory. CNBC. Walmart has found other cost-effective and simple ways to manage its products with human workers, rather than robots. Walmart spokeswoman said that approximately 500 robots were present in its more than 4,700 stores at the time the contract was ended. Walmart is continuing to experiment with technology and recently announced four brick-and mortar stores as e-commerce labs.

Total Retail’s View: Despite the fact that many retailers are experimenting with high-tech products, it’s important for companies to ensure they get a return on their technology investments. Walmart’s decision to retire floor inventory robots could signal a slowdown of the market for in-store technology. This may be because some retailers feel their employees are better suited for the job. E-commerce sales are on the rise due to the coronavirus epidemic. This means that there is less need for costly in-store technology systems. Footfall trends downward may also be a factor.

Walmart understands that technology investments are crucial to its future plans. Walmart announced last week that it will transform four stores into online e-commerce labs to test digital tools and other strategies that can speed up the fulfillment of online orders and restock shelves. Walmart wants to make its vast physical footprint a stronger advantage in e-commerce. It would not be surprising for retailers to invest in technology that is omnichannel focused, such as curbside pickup and shared cart capabilities, instead of tech solutions that are only available in-store.

Source: https://www.mytotalretail.com/article/walmart-ends-robotics-contract-betting-on-human-workers-instead/

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