CSA Exclusive: Thanksgiving store closures create e-commerce opportunity

An increasing number of big-name retailers are shuttering stores on Thanksgiving Day, but that doesn’t necessarily mean they will be losing sales.

Arpan Podduturi, director of product, retail for e-commerce platform Shopify, recently had a discussion with Chain Store Age about how plans by many retailers to close brick-and-mortar stores on Thanksgiving will likely accelerate existing omnichannel holiday shopping trends.

What is prompting big-name retailers to close stores on Thanksgiving?
There are two factors driving this policy change. First and most importantly, stores are closing to ensure the safety of shoppers. Second, COVID-19 has underscored the importance of omnichannel to all retailers, and particularly for traditionally offline brands like Walmart, Best Buy, and Target. They haven’t missed a beat leaning into e-commerce and omnichannel features like curbside pickup. 

Moving forward, we see omnichannel features as table stakes for all retailers, large and small. Consumers expect to shop online and in-store, and to have those shopping experiences work together. And when retailers take this approach, it means that during times of crisis or shifting consumer habits, the two channels — online and offline — support the other to build business resiliency. Stores staying closed on Thanksgiving and Black Friday/Cyber Monday signals to the industry that omnichannel commerce is essential to every retailer.”

How will this affect holiday sales, particularly during Black Friday weekend?
It’s hard to predict exactly how store closures will impact broader holiday sales, but we expect e-commerce to play a major, pivotal role in holiday shopping this year. We’ve seen the volume of online sales continue to rise over the past few years, with Shopify merchants, in particular, seeing a 48% increase in Black Friday/Cyber Monday weekend sales in 2019 compared to 2018. It’s likely that lockdown measures, changing consumer behavior, and store closures will only accelerate this trend.

Do retailers need to pivot more toward digital commerce for the coming holiday season?
It’s clear that the future of commerce is omnichannel, and we believe that retailers who adapt their strategies so that online and offline work together will have a greater likelihood of success over the long-term. New stores created on the Shopify platform grew 71% in Q2 2020 compared with Q1 2020, driven by a shift toward e-commerce, as well as the extension of our free trial period on standard plans from 14 days to 90 days.

And, in particular, we’ve seen e-commerce play a key role in local shopping—39% of our brick-and-mortar merchants in English-speaking geographies are now using some form of local in-store/curbside pickup and delivery solution, up from 26% in early May 2020 and 2% at the end of February 2020. 

We expect that these trends will continue into the holiday season, and will stick around well beyond COVID-19. Those who find success this holiday shopping season will be the businesses who are willing to adapt and experiment.

How can retailers quickly and cost-effectively prepare for a more omnichannel holiday
Retail, particularly brick-and-mortar, will always come with costs that businesses can do little to change. But it’s also true that Shopify has democratized access to many aspects of retail that were once available to only well-established, legacy retailers. Shopify’s app ecosystem, for example, has thousands of apps created by developers from across the world that allow retailers to customize their stores, and cater to changing consumer expectations.

By having a POS and online store that integrate natively with one another — to share transaction, product, and customer information — it means that as sales channel activity fluctuates, merchants can pivot and the experience for consumers goes largely uninterrupted. Capabilities like curbside pickup and local delivery are perfect examples of this. We’ve seen merchants repurpose brick-and-mortar space during the lockdown to act as mini-fulfillment centers, enabling them to continue to meet the needs of customers even as social distancing guidelines and mandatory safety procedures persist.