COVID World means more Xmas shopping online, and more people working in delivery vs retail

The COVID World has already led to a major shift in how people shop for and obtain items. And the start of the Holiday shopping season seems to have supercharged those patterns.

Cyber Monday was projected to be the largest online shopping day in U.S. history and it delivered just that— a 15.1% increase over last year coming in at $10.8 billion for the day. Adobe’s shopping data analyzes one trillion visits to U.S. retail sites and has calculated that the total season-to date holiday spending, including Cyber Monday, is over the $100 billion threshold. This milestone is usually not reached until mid-December. Taylor Schreiner, Director, Adobe Digital Insights, stated, “Cyber Monday continued to dominate the holiday shopping season, becoming the biggest online shopping day in U.S. history despite early discounts from retailers.” Schreiner expects to see record sales continue throughout the remainder of the holiday season and curbside pickup to gain even more momentum as shoppers avoid crowds and potential shipping delays.

RetailNext, a pioneer in the space of in-store analytics, reported traffic numbers for brick and mortar stores down 42.3% for the weekend (Friday through Sunday), with conversion (the percentage of shoppers that make a purchase) and average transaction value (how much is spent per transaction) up 3.8% and 4.9% respectively. Sales in brick and mortar stores were down only 23.9% because they were advantaged by the increases in conversion and average transaction value.

Traffic in non-mall stores was slightly better than mall stores, down 41% vs. down 44% YoY respectively. Lauren Bitar, head of retail consulting and customer experience insights of RetailNext, stated, “What sticks out to me most from these numbers is the mall vs. non-mall stores trend. There was a lot of speculation about malls suffering during Black Friday weekend amid COVID-19 concerns, especially traditional, indoor malls.” Bitar makes the point that mall stores were only 3 percentage points lower to last year than their non-mall store counterparts, which indicates that shoppers have not walked away from going to malls at this time; “Retailers have been able to pivot their stores to allow BOPIS, curbside pickup and leverage reservation systems for shoppers to reserve time slots to shop, which can allow for safe shopping at any of their store types.”

And these patterns have shown themselves in where people are (or aren't) working this holiday season. While the country is still down 9.8 million jobs vs February, jobs that involve warehouses, delivery and dropoffs have gone up consistently since COVID started breaking out in the country.

By comparison, many discretionary shopping places had already lost business and jobs before Thanksgiving. And given the lack of traffic in those stores last weekend, I can't think those jobs will come back any time soon.

And the losses in those sectors are moderate compared to the heavy decline in jobs among clothing stores.

A lot of those sales in clothing and other places that used to be in malls are now being done in big-box stores and home stores. Those places and grocery/liquor stores seem to have benefitted from the changes in shopping patterns that have happened in the COVID World.

With November and December being big months for large-chain retail, the lack of traffic and sales at many stores for the start of the Holiday shopping season is definitely cause for concern. These areas have already lost many jobs in 2020, which went on top of losses that already happened in the last half of the 2010s.

While the earlier losses means that there are only so many retail jobs left to lose, it still means there could be a wide expanse of vacant stores and lots at the start of 2021. That will not only will look bad, but will likely raise property taxes for homeowners in 2021, especially as home prices become extra-Bubbly due to low interest rates and our K-shaped recovery.