Holiday 2021: An Expert View
David Ritter, managing director of the Alvarez & Marsal consumer and retail group, spent several hours Saturday and early Sunday morning observing activities at stores of all types in the Austin, Texas, area.
His observations, listed below, to a great extent mirror those made over the weekend by other retail consultants, researchers and retailers themselves.
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He said the weather “clearly had an impact on shopping in Texas Saturday. In a dreary and cold rain, traffic, in general, was less than you would have expected for the holiday weekend. Big-box retailers like Walmart and Target did seem to have more traffic than smaller-box and specialty retailers. Across retail formats, there did seem to be a lot of buzz and activity in the curbside pickup/buy online, pick up in store areas — customers were clearly looking to multichannel functionality. Sunday morning was a different story with traffic up across the board. It appeared heavily impacted by weather, but Sunday had a different vibe and excitement level across the board — customers generally seemed excited to shop across retail formats.”
Ritter said promotional activity “felt light relative to pre-pandemic levels. The level was very likely impacted by expected supply chain and inventory positions and the ability to keep deep discounts in-stock. You still saw a few eye-catching deals in Walmart and Target in many of the traditional areas like consumer electronics — a 43-inch Smart TV for $198 — but smaller specialty formats, especially apparel, felt much less promotionally intensive than in past years.”
After speaking with shoppers, he felt “a general sense of frugality. Generally, the intention of their trip was to get the essential gifts they needed for others while doing a bit of treasure hunting for themselves along the way.”
He expects Cyber Monday to be big this year. “Two major factors contribute to this — first, the general sense of frugality I got from shoppers leads me to believe that bargain hunting will be a major motivating factor for families looking to get more with a tighter budget and secondly, there were quiet rumblings regarding news of the Omicron variant and people beginning to speculate about further lockdowns and a generally more cautious attitude about in-store shopping.”
Ritter concluded his retail excursion believing inventory positions looked significantly better than expected. “In speaking with customers, I would say expectations were very low and there was a sense that stores were in better shape than predicted. There were certain categories that seemed in worse shape than others — electronics, pet and apparel all had significant out-of-stocks in select stores. One interesting note — in many of the stores I visited, staff indicated that all product had been pushed to the floor in a ‘get it, while we have it’ approach that could hint at impending issues later in the holiday season.”
He sensed people shopping “pragmatically” for lots of comfortable work-from-home apparel, the best deals in electronics, and for health-related categories like digital sporting goods accessories and wellness products.
“Big-box national retailers seemed to be the only format with appropriate staffing levels,” Ritter noted. “Across specialty retail, staffing levels seemed incredibly light, staff seemed stretched, and there were signs up everywhere seeking job applicants. While the stores I visited seemed to be holding it together and mostly maintaining customer experience expectations, the staff was clearly under pressure, which could further exacerbate ‘The Great Resignation’ later in the holiday season.”
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