Considered by many as the unofficial start to the summer season, Memorial Day Weekend typically brings with it beach days and barbecues — and big sales.
Those who choose to shop on Memorial Day in 2020 can still enjoy big discounts from a range of brands and retailers. But the holiday won’t look quite the same as it usually does. For one, AAA is forecasting record-low travel for the weekend as many Americans continue to shelter in place. And with more than 38.6 million Americans having filed for unemployment over the past two months, consumers may not be as interested as usual in purchasing nonessentials this year.
“Given that unemployment rate continues to rise, and that schools and now camps are closed, I think the ‘need vs. want’ is more focused on the need,” said Farla Efros, president, HRC Retail Advisory. “Most people for the foreseeable future will be homebound and therefore I think purchases will be focused on food, home improvement projects, pharmacy — more necessities.”
Plus, even if fashion retailers are able to move inventory this weekend, it may come with a profit-hindering catch: deep discounts. In April — which is traditionally not a major markdown month — prices were slashed at more than half of American retailers, according to an EDITED report. Numerous companies — including department store chains like Nordstrom and Saks Fifth Ave. as well as brands like M.Gemi and Everlane that don’t traditionally discount — implemented serious markdowns as they look to get rid of excess product.
“The steep markdowns in April helped to drive some seasonal business but there is still much catching up to do,” said Beth Goldstein, fashion retail analyst for NPD Group. “If consumers get in the summer mood this weekend because they are starting to go out and about more this will help, although that is not the case everywhere, and weather will likely be a factor — at least in the Northeast, it’s not really looking to have that summer feel.”
In particular, categories including slides, flip flops, running, hiking, and sport sandals have begun to see some weekly improvement, Goldstein noted, explaining that, “as consumers are preparing for their summer activities, Memorial Day sales could help drive some momentum here.”
A growing number of states, including Colorado, Georgia and Texas, have allowed so-called nonessential stores to reopen. Retailers such as Macy’s, Nordstrom and JCPenney have begun to reopen units but with additional safety precautions, such as requiring employees and customers to wear masks, enhancing cleaning procedures and limiting the number of persons allowed in store. Plus, certain high-touch retail experiences, such as in-store dining, alternations and bra fittings, are off the table for now.
Some stores, such as TJ Maxx, have seen crowds after reopening their doors. But with so many restrictions, Efros forecasts that many shoppers are more likely to look online than to hit the shops, even in less hard-hit areas.
“Consumers would go to stores to interact, to touch, to learn, to browse sometimes without a sense of purpose,” Efros said. “Given the new guidelines, it will be hard to do any of [these things] — and therefore the experience will be more transactional versus experimental, so why bother?”
Similarly, Goldstein projects that “we will most likely see store traffic ticking up where retailers are open, but not to near pre-COVID levels.”
“I’d expect the percent of sales being done online to remain elevated,” she said.