One in five retailers say their future is "dependent" on how well they do over the holidays, but 57% had not started preparations for the season by August, according to a PayPal-commissioned survey of 1,000 small and mid-sized businesses. Respondents did indicate they had plans for what measures to take, though.
The majority of retailers (81%) said they are implementing safety measures to protect customers ahead of the holidays, almost half (46%) are rolling out curbside pickup, and about the same portion will require shoppers to wear masks and follow social distancing mandates.
Digital initiatives figure in plans this year, 34% of respondents with physical stores said they're introducing cashless payment options. Among fashion retailers, 39% are introducing virtual fitting room alternatives such as online fit and sizing tools, online showrooms and virtual stylists, per the survey, which was conducted by Netfluential in August.
It's not clear how much consumers will spend this holiday season, but PayPal suggests in its survey that retailers are offering products through multiple channels online to potentially offset the loss of in-store shoppers. Beyond their own websites, 39% of respondents to the survey said they plan to sell their products on digital marketplaces, and 31% will offer their goods through social media platforms.
The payments company, which recently added retailers like Walmart Canada and CVS to its roster, also noted that some merchants are introducing flexible payment options (PayPal operates its own installment service, Pay in 4) as a way to hedge against the economic uncertainty heading into this year's holiday season.
Some of the findings for how retailers are preparing already have evidence to support them. Major retailers and brands, including Neiman Marcus, Lululemon and BJ's Wholesale, have already implemented a curbside pickup service. Given the health and safety concerns spurred by COVID-19, and resulting changes in consumer behavior, retailers may be tied to the service even after the pandemic is over.
The instinct to offer products across multiple platforms could also be right on track. A September report from App Annie predicts that mobile commerce will surpass previous years given e-commerce events like Amazon's Prime Day and Alibaba's Singles Day working to extend the holiday season. For Singles Day, App Annie projects that sales will reach more than $45 billion.
Despite efforts to combat lower foot traffic, PayPal's research found that more than one in three retailers anticipate selling less in this upcoming holiday season compared to last year. Echoing a similar sentiment, Deloitte's annual estimate for 2020 projects that this year's holiday season will yield between 1% and 1.5% in sales growth compared to last year.