Retailers to Embrace E-Commerce For Black Friday 2021
Black Friday is five months away, but retailers, including appliance and CE retailers, are already considering the best strategies to reel in customers — and a key part of that is embracing e-commerce.
Last year, there was virtually zero in-person shopping for Black Friday because the coronavirus pandemic severely limited retail and forced many stores to close. Some large retail chains, like GameStop, closed more than 462 brick-and-mortar locations in favor of selling entirely online. Storefronts that weren’t purged were mainly used as in-store pickup points for online buyers.
Coresight’s senior analyst, John Harmon, told Dealerscope that while malls were once typically the hot destination for Black Friday or Cyber Monday, that’s no longer the case. “This year, many consumers remain reluctant to visit stores and malls (28.9 percent as of the June 14 Coresight Research survey) and have increasingly warmed to online shopping, much of which will become permanent,” he said. “Though still reluctant, consumers are less reluctant to visit physical stores this year than last year, and store traffic is likely to be up from last year’s rock-bottom levels.”
About 30 big-name retailers that relied on a large store presence in malls, like J.C. Penney and Muji USA, filed for bankruptcy in 2020 due in part to waning foot traffic.
“Though many places have returned to somewhat normal conditions, many consumers will likely elect to continue to shop online and earlier this year,” Harmon said. “Major retailers including Best Buy, Target and Walmart have announced that their stores would remain closed on Thanksgiving Day, giving employees a break and passing on making sales on that day.”
A strong rush of demand for a limited supply — supply chains were disrupted during COVID-19, particularly for electronics retailers like Sony who rely on stock imported from Asia — will drive buyers to look for products they couldn’t find earlier in the pandemic, analysts note.
In an interview with Dealerscope, NPD Group’s executive director for consumer electronics industry analysis, Ben Arnold, said online shopping continues to gain more momentum every year, but even more so during the pandemic.
“In a lot of places, consumers were spending more of their money online,” Arnold said. “Some of that has come back in 2021 as retailers have opened up in-store operations with fewer restrictions, but consumers are still spending more money online than they were before the pandemic.”
In particular, Arnold said he expects to see a rise in people purchasing electronics directly from the manufacturer.
“One of the things that I’ve been studying through 2020 is that we’ve seen manufacturers’ websites do really well,” Arnold said. “I think part of that is consumers were looking for products that have been sold out, so they’re going directly to the brand.”
While it’s impossible to gauge this early where demand will be during Black Friday and Cyber Monday in November of this year, analysts did see a rise in spending during the holiday last year, despite in-store closures. Retailers looking to capitalize on that ongoing demand should beef up their omnichannel marketing and e-commerce operations. Some retailers may also look to maintain a physical store presence where they can, since many statewide restrictions are lifted and allow in-store shopping again. In either scenario, retailers should look to make sure they have as much inventory on hand, given so many supply-chain issues over the past year.
“Retailers are facing a perfect storm of supply and demand issues this holiday season,” Harmon said. “On the supply side, CE retailers are facing shortages of electronics goods due to the global chip shortage and West Coast port congestion. On the demand side, consumers remain reluctant to enter physical stores, as mentioned above, and many new customers have become accustomed to enjoying the convenience of shopping online.”
Harmon also noted that retailers will be competing with each other, regardless if one is in-store or only selling online, because people have spent the past year-plus online shopping and discovering new places to find goods — this, as Harmon put it, “fragments the retail consumer base.” One way retailers can stand out and capitalize on incoming demand is to begin advertising early, and often. Analysts note that companies who get their Black Friday or Cyber Monday ads out in advance of the competition have a better shot at clinching sales.
GfK’s vice president of market insights, Josh Wanderman, said: “Retailers should adjust their promotional schedule to span across the weeks leading up to the event, to maximize opportunities, especially as it relates to early shopping and discounting.”
Buying online and picking the items up in-store could come back in earnest this year, now that many stores are open. Arnold noted some people still just don’t feel comfortable having large electronics delivered — TVs are an “evergreen” Black Friday purchase, Arnold said, but noted that some people prefer to pick up those types of big purchases in-store after ordering online.
“Overall, it’s safe to assume the bulk of 2021 Black Friday sales will be conducted online, and analysts noted that many people may just wait to see if the following Cyber Monday offers better chances to buy,” Harmon said.
Here are the top three consumer electronics categories that every smart retailer must monitor around Thanksgiving, according to Dealerscope research.
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