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Forecast fuzzy for 2020 holiday shopping; retailers hope for spending wave

Jane Keys of Sparks browses coats inside a department store at The Summit Reno mall on Oct. 21.
Photo: Kaleb N. Roedel

RENO, Nev. — As the pandemic lingers across the country, Americans are looking at a Halloween without trick-or-treating, a Thanksgiving without family flying in for food and football, a Black Friday without crammed store aisles, and a December without ugly-sweater parties and white elephant gift exchanges.

Singing “Auld Lang Syne,” swaying shoulder-to-shoulder in a bar on New Year’s Eve? Not this year, more than likely.

Meanwhile, a standstill in Washington over stimulus funds and an uncertain political climate this election season are also creating potential barriers for spending this holiday season.

This time of year, the economy relies heavily on consumer spending — according to the National Retail Federation, holiday sales represent about 20% of annual U.S. retail sales each year. Moreover, retail spending accounts for roughly 25% of consumer spending in a typical year.

This year, holiday sales are projected to uptick between 1% and 1.5%, which would result in up to $1.2 trillion in retail sales during the November-to-January timeframe, according to consulting firm Deloitte. A year ago, in 2019, holiday retail sales grew 4%, according to the NRF.

In Northern Nevada, some brick-and-mortar malls and shopping districts are cautiously optimistic the holiday season will bring tidings of great spending despite the pandemic.

“It’s very difficult to predict what the actual sales will be,” Peter McClure, director of property management of The Summit Reno mall, told the NNBW. “It’s probably a little early to tell, even though we’re in late October, what the trending may be. But we feel the trends are positive, based on what we’re seeing over the summer months, when it’s traditionally slower.”

In fact, the outlook for the holiday shopping outlook is so fuzzy that the NRF has delayed the release of its holiday forecast, a report it traditionally reveals in early October.

The organization says it is waiting until it has “more solid data” to make more reliable projections “likely in November.”

Due to the uncertainty, McClure said local and big box retailers at The Summit Reno, and all around the country, have been pushing an earlier start to the holiday season, with some locations already offering sales and promotions as early as Oct. 1.

Retailers want to prevent overcrowding at stores in an era of masked shoppers and social distancing mandates — not to mention, spacing out shipping will help alleviate pre-holiday order bottlenecks and surcharges sure to impact an already-strained supply chain.

“They’re really trying to lengthen that time and not have such a dependency on that Black Friday weekend or the week before Christmas,” McClure said.

Large crowds, as seen here for the 2019 Midtown Holiday Party, will not be happening this holiday season amid the pandemic, which could have major impacts on shopping trends in Northern Nevada.
Courtesy Photo

In Reno’s Midtown District, home to more than 250 businesses, this holiday season may be especially important to retailers’ bottom line.

Many of the brick-and-mortar stores dotted throughout the district thrive off of the stream of tourists flooding into the region for events, which were wiped from calendar this year, said Craig Parish, president of Midtown District Reno.

“… A of these businesses have really thrived with events like Burning Man and Hot August Nights,” Parish said. “Reno is kind of an event-driven town. When we would do the Midtown Art Walk, even though it was a Thursday night and five-hour event, some businesses and bars would say that’s one of their biggest sales, and now we’ve lost all those.

“And so I think holiday shopping really becomes one thing we hope we can count on, and hopefully this is the thing that carries us through the end of the year.”

Yet, with many consumers still spending the majority of their time at home and avoiding crowds, it’s no secret more spending will occur online this holiday season.

Deloitte is projecting holiday ecommerce sales to jump 25% to 35% this season — amounting to between $182 billion and $196 billion — and account for nearly 17% of total retail sales this year.

Last year, online sales grew about 15%, with sales hitting $145 billion, per Deloitte.

Julie Arsenault, co-founder of Reno-based Panty Drop, a subscription underwear box for women, feels the ecommerce boom isn’t going anywhere, even post-COVID.

“Eventually, the pandemic is going to be over, but I don’t think brick-and-mortar is ever going to look like it did before,” Arsenault said during a mid-October virtual discussion on the future of ecommerce hosted by the University of Nevada, Reno Innevation Center. “I think people are making a shift to online and I think it’s going to be a real lasting shift. And I think the innovation is going to come in, creating online shopping experiences for products that haven’t sold or sold well online in the past.”

Sydney Larson, co-founder of Lily Bird, a Reno-based subscription startup that delivers bladder leakage products to women, was also on the panel. Among other things, she spoke about the rise of ecommerce in America and in particular pointed out that Amazon isn’t the only option. 

“I think Amazon is ripe for disruption. I know that sounds crazy, because they’re a behemoth,” she said. “But, I think a lot of consumers are starting to care more where their dollars are going. There’s this antitrust movement. We also sell our products on Amazon and it’s a total nightmare as a seller.

“And I think if there was an alternative, a lot of people would take it.”

To that end, during the pandemic, Parish said many Midtown businesses, amid shutdowns and capacity limits caused by COVID, have “ventured” into ecommerce to maintain relationships with their customers.

Adding curbside pick-up options has also helped retailers stay in business, he noted.

“I want to give credit to the Midtown businesses owners who have been very creative in coming up with different business models on the fly,” said Parish, noting that Midtown District Reno even launched a mobile app, allowing users to explore businesses in the area and promote specials.

Perhaps a promising sign for businesses heading into the holiday season is the fact that retail sales rose 1.9% in September compared to August, according to the U.S. Department of Commerce.

The question, however, remains whether shoppers will splurge during the holiday season.