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BlackFriday_01

Black Friday has always been a huge shopping day, but in recent years online shopping and Thanksgiving Day openings have taken some of the urgency out of the event. This year, retailers are adjusting their Black Friday plans to account for the desire of employees to have Thanksgiving off and for the likely continued presence of the COVID-19 virus.

Executives in the $3.9 trillion retail industry are facing their toughest call yet in an unprecedented year of hard decisions: What should they do inside their physical stores on Black Friday, amid a deadly pandemic that’s still likely to be raging?

Walmart, Target and other big chains have already said they will close stores on Thursday, Nov. 26, for Thanksgiving Day — a move long advocated by employees. But whatever happens the following morning needs to feed the frenzy of American consumers hungry for a bargain, even if Black Friday no longer marks the start of the holiday shopping season.

“It’s a real dilemma,” said Neil Saunders, managing director of GlobalData Retail. “Black Friday has traditionally been about getting as many people into the store as you possibly can. Now they have to restrict numbers. So retailers will look to do a combination of things.”

Options under discussion include limiting opening hours on Black Friday to help control crowds, especially in the wee hours when lines usually form. Adding security to enforce social distancing, mask-wearing and one-way aisles could also work. Given that many shoppers want a contactless experience, it’s also critical to enhance curbside pickup. And retailers could bring some products off the shelves and set up temporary displays under tents in their parking lots.

While all retailers are likely to push shoppers online early and often, doing so carries extra costs to fulfill orders, and web-only exclusives risk angering customers who still prefer to shop in brick-and-mortar boxes. Target has already said it will offer 20,000 additional items on its website this year; Walmart takes pains not to treat different pools of customers differently.

Last year 14% of the $1 trillion in holiday spending went online, according to researcher eMarketer, up from 10% in 2016. Holiday deals start to appear online just as Halloween costumes are being put away. Even on Black Friday, more shoppers went to the web last year than visited stores, according to a survey from the National Retail Federation.

E-commerce costs will soar this holiday due to supply-chain bottlenecks. Couriers FedEx and United Parcel Service both hiked delivery prices recently after lockdown-fueled demand exceeded the traditional holiday rush.

“It is clear that the fourth quarter is going to be monumental for e-commerce, but it is also clear that there is no infrastructure to support it,” said Juozas Kaziukenas, founder of researcher Marketplace Pulse.

To avoid the soaring costs of home delivery, Walmart and others will likely encourage shoppers to buy online and pick up those items at the store well before Black Friday. There’s extra urgency this year because Amazon.com had to postpone its usual mid-summer Prime Day sales event to autumn.

Target, Walmart and other retailers have rapidly expanded so-called curbside options in recent years, and Best Buy offered contactless pickup when its stores were closed in late March due to lockdowns. But there’s no curb big enough to handle the crush of gift orders around Thanksgiving, so retailers will have to use their mobile apps to space out those pickups.

One idea being floated is to move merchandise outside under tents and use handheld devices to ring up sales. The technology is ready: Walmart debuted its “Checkout With Me” service in 2018. That would free up space in stores but could lead to theft and would still require social distancing. Weather would factor in as well, and the weeks leading up to Thanksgiving will be more rainy than usual, according to Weathertrends 360, a forecasting service used by retailers.

“It’s interesting, but ultimately very unrealistic,” Saunders said of outdoor marketplaces. “I don’t see it happening.”

What has happened in previous years to ease the rush on Black Friday are staggered promotional events, often tied to particular categories, brands or gift ideas, that retailers hold in stores on the weekends leading up to Black Friday. This helps stores grab early bird shoppers and steal a march on rivals.

Such mini events rely on must-have new items like the Nintendo Switch, which lured many shoppers into stores in 2018. And resetting store displays each week could disrupt operations and put even more strain on store employees already concerned about COVID-19.

The stakes are even higher for mall-based retailers, many of whom were already struggling due to forced closures and diminished demand for apparel. A strong Black Friday could help salvage what’s been a horrendous year, but enclosed malls are the last place shoppers want to be right now. Online ordering could help, but even then, curbside pickup is not an option for many.

“Everybody is thinking outside the box, both literally and figuratively,” said Craig Johnson, president of Customer Growth Partners. “They’re scrambling.”

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