Are stores going to turn into ghost towns?

Discussion
Photo: RetailWire
Dec 11, 2020

According to survey findings from Square, 56 percent of retailers expect that many consumers will not shop in-store at all over the holiday selling season. Yet an accompanying survey of consumers found 79 percent feel safe shopping in a physical store.

The survey of U.S. consumers, taken in November, found 53 percent of consumers still wanted mask requirements for stores.

A number of other recent surveys appear to indicate that consumers remain somewhat comfortable with in-store shopping when safety measures are in place and see benefits versus shopping online:

  • A survey taken in late October from ENGINE Insights found 85 percent of consumers plan to shop in physical stores for their holiday gifts. However, 72 percent plan to go to stores during less busy days and times.
  • A survey from NMI taken in in October found 29 percent plan to primarily shop in-store this holiday season and 40 percent plan to shop both in-store and online. When asked which factors will have the most impact on their choice of retailer on Black Friday, the top answers were: store sanitization, cited by 47 percent; social distancing guidelines, 45 percent; and convenience of purchase, 43 percent. 
  • ICSC’s Thanksgiving Weekend Survey conducted online on Nov. 30 found that, of those who chose to shop online, 44 percent listed health and safety concerns as a reason, with bigger factors being convenience, cited by 60 percent, and wanting to take advantage of promotions, 47 percent. Among those who chose to shop in-store, the top reasons were: seeing, touching or feeling items, cited by 55 percent; getting items immediately, 54 percent; and the convenience of one-stop shopping, 39 percent.

The in-store optimism comes despite Sensormatic Solutions reporting store traffic over Black Friday weekend tumbled 49 percent, although the company suggested weekday traffic rates over December should improve.

Brian Field, senior director of global retail consulting, Sensormatic, said in a statement, “All of our data suggests that more shoppers are using their work-from-home status to visit physical stores during the week. It appears this trend will continue into the holiday season.”

DISCUSSION QUESTIONS: How concerned should retailers be about drops in store traffic this holiday season? Do you think the reported 49 percent decline in Black Friday weekend traffic is being extended across the holiday season as a whole?

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"The holiday shopping season will be more spread out, and that's not a bad thing. Having more shopping days with fewer crowds could be a very nice shopping experience upgrade."

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36 Comments on "Are stores going to turn into ghost towns?"


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Mark Ryski
BrainTrust

The pandemic situation is fast changing – and not for the good. The survey results from October are already stale. Since the situation has gotten worse, and lockdowns have been extended or expanded, the impact on retail store traffic will continue to be felt. The 49 percent drop in Black Friday reported by Sensormatic is largely skewed to mall-based retailers, so the impact is likely being over-stated, but the general direction is correct. Store traffic is going to be significantly impacted this holiday season.

Peter Charness
BrainTrust

Black Friday is probably an indicator, but not necessarily the whole story. The convenience of shopping online rather than dealing with in-store madness (doorbuster lines and all) makes shopping online for Black Friday a compelling alternative. But there is no question that the balance between online and in-store is going to remain skewed towards online this holiday season, and will probably stay skewed until customers feel safe to be inside public places.

Neil Saunders
BrainTrust

What nonsense! Sure, traffic may be suppressed. Sure, people may consolidate store visits so they lower the risk of viral exposure. Sure, *some* people may avoid stores. However there is absolutely no evidence that the majority of consumers are completely avoiding stores. It’s actually the opposite: foot traffic has been rebuilding and people have started to go back to non-essential retailers. Plus, the majority of sales still take place in stores rather than online.

As for Black Friday, the reason traffic dropped on that day and over that weekend was mostly because retailers sensibly engineered a much longer selling season so some physical sales were pulled forward into November and even October. This meant that the crowds of past years did not materialize. The comparison is not apples and cannot be extrapolated to the wider trend of store shopping over other periods.

Cathy Hotka
BrainTrust

Fear not, retailers! A drop in in-store shopping is to be expected this year, but once vaccines reach critical mass, customers will be back. And based on the number of delivery trucks on my street, people are buying plenty of things online.

Bethany Allee
Guest

The reality is that physical locations must evolve to address new customer needs. The other reality is that in-person shopping is not a priority for many Americans. Now is the time for retailers to determine how they’ll best leverage their in-person shopping experience to adhere to what customers need right now – and how this impacts their future.

Georganne Bender
BrainTrust

Are stores going to turn into ghost towns? Of course not. Yes, people are shopping more online because of the pandemic but I believe that once we have a vaccine store traffic will come back because people like to shop.

One of the things my partner Rich and I do each holiday season is visit stores to observe what’s going on. While we haven’t seen crazy crowds as in past years people are still shopping in-store. Sometimes I think the goal of these clickbait polls is to stir controversy and spread doom and gloom. The sky may be a little grayer right now but it certainly is not falling.

Mark Ryski
BrainTrust

Georganne I do agree that it’s not all doom and gloom, and essential retailers that remain open during the holiday season will likely be very busy. However across the many thousands of retail stores that my company tracks store traffic in daily, the data are clear — store traffic is significantly down. The vaccine news is definitely positive, but the effects won’t be felt until well after the holiday season.

Georganne Bender
BrainTrust

I agree, Mark, that store traffic is down. Of course it is, and we expect it to be so until we get this pandemic under control. The effects of the vaccine won’t be felt for a while but it will be felt and for the better.

I am so tired of hearing about the death of brick-and-mortar stores and I am sure the retailers who work in stores are, too. 2020 is an aberration, let’s wait until things shake out in 2021 before we call the coroner.

storewanderer
Guest
1 year 1 month ago

Given the financial situation of many retailers (highly leveraged), they cannot simply “expense cut” through this period of significant in-store traffic declines. These loans have covenants and other terms that need to be met, often revenue based. A few retailers that aren’t highly leveraged can get through it with the “expense cut” method — but the highly leveraged ones are in a much more precarious situation. Basically at the mercy of their lenders. You would think lenders would like to be flexible to keep retailers afloat, but ask Toys “R” Us about that.

Di Di Chan
BrainTrust

Massive traffic in stores should not be the target experience. Pandemic or not, no one likes waiting in long lines. The ideal situation for retailers and shoppers is to spread out the foot traffic, so people are spending more time stress-free shopping. The pandemic changed shoppers’ behavior: people are shopping less frequently with bigger baskets. People are avoiding rush hour shopping even more now. Instead of everyone crowding and rushing for one day to get Black Friday shopping done, many retailers spread Black Friday deals to an entire week — and it’s working pretty well given there’s a global pandemic going on.

The holiday shopping season will be more spread out, and that’s not a bad thing. Having more shopping days with fewer crowds could become a very nice shopping experience upgrade.

Dick Seesel
BrainTrust

The drop in Black Friday store traffic was triggered by the pandemic but also by the extended promotional calendar and the growth of safer shopping options. The 49 percent drop on that day may not be as severe during December, but there’s no doubt that store traffic will fall. I’d expect big box “one stop shopping” retailers like Walmart and Target to gain more share at the expense of department stores and mall-based retailers.

In just two short weeks (from Thanksgiving week to the current week), the average daily cases have risen by 22 percent and (unfortunately) average daily deaths have risen over 60 percent to catastrophic levels. State and local governments are now imposing new restrictions that weren’t in place before Thanksgiving — at least, they’re trying to.

Lee Peterson
BrainTrust

Short answer: yes. Also, this is just the tip of the iceberg. Over 100,000 stores are expected to close in the next five years, so it’s a lot bigger than Christmas traffic. The new normal combo of e-commerce, BOPIS, delivery, dark stores and touchless retail in general is changing the game to something completely different than the landscape we knew just 20 years ago. Retail is now a digital-first world and those that adjust to that in haste will be the big winners going forward.

Raj B. Shroff
BrainTrust

Totally agree, Lee.

Chuck Ehredt
BrainTrust

This is a dramatic question aimed to invoke emotion. Customers are full of emotion now due to COVID-19 but hopefully that will soon pass. When things stabilize, some customers will be embracing the store experience, others will expect delivery, and others will embrace a more hybrid approach. Whatever meets their functional or emotional needs.

In that context, retailers need to optimize their assets to generate ROI – and that will include further optimizations to the supply chain (including the last mile). I imagine an element of the store will be fulfillment, but there are products that people really want to see, touch, and experience before laying out their hard-earned money. In such an ecosystem, retailers need to adapt and design their business model to be as agile as possible to respond to evolving trends.

Richard J. George, Ph.D.
BrainTrust

This is a good follow up article to yesterday’s discussion on shoppers returning to stores. In essence, retailers need to address two shopper issues: what will keep them away and what will make them visit stores in the new year. As discussed previously, shoppers will not visit stores in which they don’t feel safe. Retailers need to constantly assess from a shopper’s perspective, whether their stores are viewed as safe. So the lack of safety will keep them away. What will be the positive reasons to venture into the stores? Simply – make it fun, interesting, convenient and a value. Give them a reason to drive by other retailers to visit your store.

storewanderer
Guest
1 year 1 month ago
The stores are absolutely safe. COVID spread is from interacting with infected people. They are deserted of customers, so it is very safe. There is nobody to interact with. I have never felt more safe in my local mall, than I have this month. The place is so empty of customers, it is almost creepy. It reminds me of the other mall that used to be here that went out of business and was demolished, it has so few people inside now. And the anchor stores (Macy’s and JCP) are even more empty of customers, than the mall itself. But the consumer needs a reason to visit the mall. This past year, we are not going out nearly as much so no need to buy as many new clothes. Other categories like beauty, given the mask rules, are severely down in demand for certain categories. Perhaps some folks used to go out to the mall and pair it with getting something out to eat but now that is not so easy with restaurants closed in… Read more »
Gary Sankary
BrainTrust

I believe there is reason to be concerned, especially for retailers who have not invested in digital capabilities to reach their customers. Strategically-minded retailers went big on investments that allowed them to balance their customers’ demand for products and services and their desire for safe shopping experiences. For many of those retailers, given their performance so far in 2020, the holidays will be very successful. I strongly believe that reducing store traffic during this pandemic is the right thing to do, and we need to remember that in many cases the retailers themselves implemented strategies around Black Friday to do just that.

Raj B. Shroff
BrainTrust

2020 has been a wake up call. We have been pushed to realize the efficiency of online shopping, the possibility of remote meetings and the great feeling of not making frivolous trips to the store. In the near-term those drops lessen the likelihood of impulse add-ons and much easier to build baskets in a physical setting. That will hurt. And it’s easier to order online and have a gift sent than to buy in-store, package up, then ship to family. I do think Black Friday traffic is a bit of foreshadowing for holiday foot traffic, especially with rising cases.

Longer-term, retailers should be concerned about the drops if they aren’t preparing for the continued shift to e-commerce and any other changes in post COVID-19 consumer behavior.

Jeff Sward
BrainTrust

Retailers needed to be worried about holiday store traffic six months ago, and three months ago, and one month ago. It should have been clear early on that store traffic was going to be down, so it was only a question of how much. And then Black Friday gave us a pretty good clue. And six months ago who knew what the real drop was going to be? Inventories will be both oversold and undersold. There are so many more factors in play for a successful 2020 than there were in 2019. Cleanliness and traffic control, BOPIS, in-store fulfillment of e-commerce orders, local delivery, unemployment and lack of stimulus to name a few. So mall traffic will be down, but we shall see which retailers emerge with the best execution.

Lisa Goller
BrainTrust

Yes, many retailers will imitate Target and Walmart’s successful use of stores as e-commerce fulfillment hubs. Also, Whole Foods and Kroger have embraced dark stores for fast, urban fulfillment.

By contrast, this year Amazon expanded its fleet of fulfillment centers, stretching from North Dakota to Mississippi, as it operates comparatively fewer stores.

Regardless of how they fulfill e-commerce orders, retailers must unite their company’s merchandising efforts for efficient omnichannel service.

Rich Kizer
BrainTrust

No, they are not going to be ghost towns. In our conversations with independent and chain stores, we have found that they are gearing up to reshape the experience in the stores. They have planned Ladies Day, Guy’s Night Out and many other promotional efforts in-store. I believe that folks are ready to take action. They are doing all they can, and that’s a lot. Stores are being relayed to present great ideas and merchandise/promotions to build sales and traffic in this last rush period. I know they are hearing much about their business being in danger, I hope they take that with a grain of salt and prove that they can and will survive in this market with their streetwise ingenuity.

storewanderer
Guest
1 year 1 month ago

You cannot even do promotional events or build a critical mass of traffic in this last rush period like you describe in many places because 1. Many people do not want to attend such in person events during the pandemic and 2. Many areas have capacity restrictions that will either make very difficult or outright prohibit this sort of thing.

In my area the local Dillard’s does a “by invitation” Christmas Party every year. The party involves a small gift bag with some samples in it, some refreshments, some product demos, raffles, and a small discount on most items in the store (10-15%). The “invitations” go to the customers who are on the mailing lists of some of the salespeople in the store. They do the party on a Sunday night at 6 PM after the regular store closing time. This event typically has hundreds of people show up. This year, they invited fewer people, and even fewer showed up, I don’t even think it was 75 people who showed up.

Joan Treistman
BrainTrust
If all the surveys are reporting about 50 percent in one direction and 50 percent in another direction, you can be assured that retailers are going to suffer. There could be about 50 percent of the population that show up at stores without a mask and/or disregards distancing requirements. The other 50 percent will avoid that risk or use that experience as a marker for how they will adjust their shopping behavior now and in the future. And that’s why there was a 49 percent drop in Black Friday weekend traffic. The studies reported in the article are showing percentages of percentages. I’m not questioning the data, simply what the results actually mean for store traffic. And let’s not forget that even with vaccinations coming, we have to accommodate the anti-vaxxers and the interval between now and when the country has established herd immunity via vaccines. We’ll still need to wear masks, distance and wash our hands. What percentage of the population will go along with CDC guidelines? People who don’t believe there is a… Read more »
Gene Detroyer
BrainTrust

“What should we do on Saturday?”
“Let’s go shopping.”

That would sound like a very odd conversation today, but I remember when it was quite common. In fact, often, shopping was a default activity.

We mustn’t let the extremes of the pandemic be an excuse for the underlying trends that retailers face. Today, how many of you go to a store without an idea that you want or need something specific? That mindset changes the entire equation of the go-to-store decision.

Once you decide that you need something specific, today you ask, “Can I get it without going to a physical store?” How often will the answer be “of course”? That thought process has nothing to do with the pandemic.

For the record, my wife and I finished all our Christmas shopping. All from our home. All online. Pandemic or not, we would have finished all our Christmas shopping. All from our home. All online.

Mohamed Amer
BrainTrust

You cannot validly extrapolate Black Friday weekend traffic to the entire holiday shopping season. Stores are still getting traffic, it is more spread out throughout the week, and online sales are booming. Retailers are developing more creative pickup and delivery options, earlier promotions, fusing the online and physical, while still investing in aesthetically and visually appealing in-store shopping experience. Consumers are adjusting accordingly.

The store remains the pulsing heart of retail, yet it need not be the only indicator of a retailer’s success, and one day, or weekend, does not foretell doom and gloom.

Rich Kizer
BrainTrust

I sincerely hope that all the independent retailers who read what the “experts” are saying about the validity of their business will take it with a grain of salt and accept it as a challenge to prove their talents. My partner Georganne and I see a somewhat different picture of what these retailers are doing for the last weeks of holiday shopping; and what they are doing is amazing. We see retailers re-merchandising their stores constantly to present the best possible store to customers. They are creating events – special nights for men and women, outstanding service from staff and services to attract and please their customers. They are now giving it their best efforts, taking nothing for granted, and I believe they will surprise everyone.

VeeCee
Guest

Some “special event” is not going to get me, or the average shopper out to a store.

Bob Phibbs
BrainTrust

I hate headlines like this. #nothelpful #clickbait. What I’m seeing is far from “ghost town.” Yes traffic is down. This isn’t news. We’ll continue to see traffic down in the short-term – it’s a stay-at-home order world right now for California and others.

storewanderer
Guest
1 year 1 month ago

Well, when the numbers come out we will see what happens. Stores are still very busy in some places, but ghost towns in others. For some retailers, online sales should help make up for the lack of in-store traffic. Returns will be another interesting thing this year. We will see how that goes.

Ralph Jacobson
Guest

Retailers need only be concerned about government restrictions that limit their store traffic. Emotional consumer responses showing up in surveys aside, there is little evidence of shoppers avoiding stores that are fully opened for business, as big box, supermarkets and other stores can attest.

Cynthia Holcomb
BrainTrust

Sometime next year, when the darkness of COVID has lifted aided by vaccines, consumers will be thrilled to leave their homes to shop. Shopping is a destination sport, a sensory experience, fun, social, and interactive. In-store retailing and merchandising of product is a form of art, emotionally inspiring and connecting shoppers to a physical product not possible online. Thus, in-store shopping will become new again. A back in the saddle event!

RandyDandy
Guest
1 year 1 month ago
It’s not so much about individual stores becoming “ghost towns” as it is about whole shopping enclaves turning to dust. Also, the tribulations of chain retailers, with deep(er) financial pockets, should not be conflated with the more dire economics of indie shops. Meanwhile, the pains caused by the pandemic are worse in places where stores, large or small, were already hurting for business. So, even when the vaccine comes and the population is ready to go back – the fray in these places may be irreparable. That is, unless there’s a near-complete rethinking of how this works. In order for one-offs and small shopping districts to succeed, it will take a thoughtful collaboration between realtors, real estate developers, urban planners, business owners, concerned (shopping) citizens and more to re-create commercial districts in a more cohesive way. As they say, strength comes in numbers — as well as through borders that are defined. One thing that always leads to a shopping area’s (or singular store’s) downfall is placing your goods beyond what are the logistically logical… Read more »
James Tenser
BrainTrust

I have never enjoyed the Black Friday retail frenzy personally, and I have always suspected that it undermined retail GMROII even though it drove big volumes. From that perspective I welcome a more spread out holiday season with somewhat quieter stores, where shoppers can take a little more time to consider more gift items — hopefully at better margins.

A good chunk of the traffic loss is being offset by online ordering. This method seems to be tailor-made for holiday gifting — especially the ability to deliver items directly to gift recipients. In this COVID year, the preference is even more obvious.

This situation is hard on many retailers, to be sure. Next year will surely be better, but some habits have already been affected. There will be new opportunity in the changes. If “doorbusters” were to disappear, I would not shed a tear.

storewanderer
Guest
1 year 1 month ago

It depends on the area. In Northern California, stores are still very very busy and based on how the stores look (need to be restocked), they are moving a good amount of product and are healthy. Probably not doing as great as before but still appear do be doing just fine. In Nevada, where there are more strict capacity limits and a more shaky employment situation for many, retail mall, and the off mall bed bath, clothing, etc. stores are absolute ghost towns. Stores are neat and well stocked no matter what time of day you go. There are few employees and even fewer customers. I have never seen these stores with so few customers, as they have had in November and this month. I have seen some retailers cut back operating hours during the week from their planned holiday hours due to the stores having so, so few customers on weekdays.

Oh, Target, Costco, Ross, TJ Maxx, and Walmart are very very busy still … maybe that is our only future. Grim.

Ricardo Belmar
BrainTrust
Ghost towns? Not a chance! Of course, traffic is down, and of course, every consumer intent survey is going to show scary results for in-store shopping. If there’s one lesson to be learned in 2020 is that consumer intent is quite fickle, and you can’t count on consumers who say one thing in one month to carry it through to the next. The pandemic has created constantly changing conditions across changing geographies that make it almost impossible to make these generalities meaningful. Smart retailers that were already investing in digital technologies to make shopping easier for consumers have been reaping the benefits of those investments throughout 2020 as most consumers have shifted to digital-first shopping and rely on stores to provide fulfillment services rather than discovery opportunities. What choice did everyone have? With lockdowns, capacity constraints, etc, this was an obvious outcome. Yes, consumers have formed new habits, and yes, many of them will be sticky and change how consumers shop going forward post-pandemic. But that in no way means stores will become ghost towns.… Read more »
Craig Sundstrom
Guest

I’m puzzled by the question: should retailers be “concerned” by a large drop — or any drop really? Of course, it’s an existential threat. But there’s no mystery as to why it’s occurring and more importantly, there’s precious little that can be done (that isn’t being done already).

Businesses of course routinely face existential threats — demographic, economic or technological changes, eminent domain, etc. What sets this apart is the suddenness of it, and the limited options open to respond.

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Braintrust
"The holiday shopping season will be more spread out, and that's not a bad thing. Having more shopping days with fewer crowds could be a very nice shopping experience upgrade."

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