Thursday August 06, 2020 |Notes

Black Friday store events are dead, online competition will rise

A handful of large retailers, including WalMart, Target and BestBuy, have recently announced they will not open physical stores on Thanksgiving Day in 2020. This is a shift away from the trend of promoting sales with exclusive in-store offers, and may only be a first-step in the measures taken by stores to safely offer in-store shopping during the coronavirus pandemic.

Companies are instead focusing on online sales, which will further increase the digital commerce transformation occurring in response to the pandemic. From the article mentioned above:

Even though they are closing their stores for one day, Walmart, Target and Best Buy are touting that they will be offering deals throughout the holiday season and earlier than usual.

“This season, you can count on getting extra-big savings without the extra-long lines, with plenty of opportunities to score the best deals on the hottest items both before and after November 26,” Target wrote in its corporate blog A Bullseve View.

Retailers are smart to emphasize that promotions are available both online and in store and for a long period of time, as this will prevent crowds in stores, says Mousumi Behari, digital strategy practice lead at digital marketing firm Avionos. The Thanksgiving and Black Friday shopping days are often associated with long lines and large groups of people in one place—scenarios consumers are especially avoiding now during the coronavirus pandemic.

As companies shift towards putting digital commerce first, more money will be spend on digital ads, sales will be introduced earlier, and the digital commerce landscape will become more competitive. Web Smith addressed this in a recent post at 2PM:

By closing all physical stores for Thanksgiving, the market can anticipate digital ad spend of historic proportions. This spend, in turn, may lead to a rise in customer acquisition cost (CAC) for smaller retailers.

Advertising performance may suffer due to the influx of new and back loaded enterprise spend on digital platforms. And on top of it all, margins will be further diminished by increased logistics costs. In 2020, eCommerce has been a bright spot of hope for a shaken economy. But surviving the next months despite all of this uncertainty will be a tough task, even for an industry that seems inevitable.

In 2020, holiday shopping will see a massive shift away from in-store events like Black Friday and towards digital shopping. Sales will come earlier as companies seek to reach consumers ahead of the competition. Digital ad spend by large companies will increase, and marketing costs will increase on ad network for all advertisers. The entire month will be an online shopping event as the competitive landscape of retail evolves.

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