A Retail Guide to Navigating an Unprecedented Holiday Season

By Abhinav Chandra

The past few months have been eventful, to say the least, with the May/June slowdown of COVID-19 cases followed by the lifting of lockdown mandates, a resurgence of cases, a quick economic rebound then a growth slowdown, and pretty much everything in between. Unfortunately for the U.S. fashion market, this has included a 32% year-over-year sales decline in 2020 Q1-Q2, and a 19% decline year-over-year for Q3 and 34% decline year-over-year in sales in Q4. The latter’s decline is driven by a forecasted third-wave spike in COVID-19 cases and deaths with a warmer-than-usual winter and corresponding decrease in cold weather category sales. And while 2020 has been a year full of surprises, one thing is crystal clear: The 2020 holiday retail season will be one for the books.

To navigate these industry uncertainties, Fashion Retailers and Brands will need to think creatively and act quickly to survive. Here are insights and actions HighPoint Associates is sharing with its clients in this sector:

1. Prepare for a second wave of store closures or significantly reduced in-store traffic.

While the predicted Q4 spike in COVID-19 cases may not result in government-mandated store closures, HighPoint believes customer traffic will decline substantially and make operating non-essential stores a challenge. Retailers need to put plans into place for this scenario now, including

  • Having clear criteria and procedures on when, where, and how stores will be closed and operated, and how staff will be utilized during this period
  • Seeking flexibility from suppliers to scale inventory up or down in response to demand.

2. Expand Black Friday to Black November with a focus on e-commerce.

According to the National Retail Federation (NRF), in 2019, 124MM people shopped in stores on Black Friday weekend.* With high levels of COVID-19 still present in the community, it is highly unlikely the majority of people will shop in person this year. This will lead to increased online shopping during the holidays. The expansion of Black Friday into a week-long event has been happening in e-commerce over the past five years. In 2020, it is imperative that Black Friday pricing is made available through both e-commerce and in-store shopping over multiple weeks in November. Marketing and merchandising should be lined up to support the early onset of Black November. During this time, retailers should plan to strengthen their omnichannel operations, shifting marketing spend towards online and ensuring the best possible deals and prices are available online.

Prioritizing online sales will result in an increase in price transparency, and customers will be more price sensitive than usual. It’s important that pricing and promotions are competitive and flexible. Our recommendations are:

  • Implement and refine online price-matching capability
  • Adjust pricing and promotion individually for e-commerce and in-store channels
  • Enable stores to change prices quickly through a fast communication process and rapid execution, using either digital signage or in-store printing

3. Prepare for e-commerce order delivery challenges

Given the expected surge in online shopping during Q4, we also predict there will be increased delays in delivering products to the customers. Both FedEx and UPS have announced plans to hire 75,000 and 100,000 additional workers, respectively. This large scale-up in capacity amid an ongoing pandemic introduces potential for increased delays in customer delivery due to the size of the scale-up needed to meet demand. To help protect brand integrity and customer loyalty, retailers should prepare a playbook to mitigate these events with focus on:

  • Adjusting delivery promises based on latest data (in case of severe delays add a buffer to UPS/FedEx/USPS delivery times)
  • Ensuring notification to customers as soon as possible if an order is delayed
  • Offering delivery alternatives such as safe curbside pick-up for local customers
  • Making order and delivery status prominently visible in customer accounts
  • Investing in marketing to encourage customers to shop online earlier
  • Re-training customer service staff on handling customer complaints about delayed deliveries, especially those that will not reach before the Holidays

Being proactive with the above will help reduce negative customer experiences as well as reduce customer calls and associated costs.

4. Proceed with caution in cold weather categories like Outerwear

Given the prediction of a warmer winter and the likelihood of significant reduction in mobility, sales in cold weather categories like outerwear, cold weather accessories, and the like are projected to decline by more than 50%. In addition to overall recommendations, for cold weather categories specifically HighPoint Associates recommends:

  • Reducing depth and/or breadth of upfront purchases with flexibility to return products where applicable
  • Investing more in or introducing informal and casual outerwear like sweatshirts and hoodies.
  • Increasing diligence and frequency in tracking overstock inventory and taking quick corrective actions
  • Reducing prices earlier in the season, even to liquidation levels if necessary (do not wait until January 2021)
  • Implement a coat donation program where customers can buy new cold weather clothing at a discount with a donation of a cold weather garment to charity

5. Invest in increased automation in sales planning and inventory management

There will be high uncertainty and rapid swings in sales over the next 12-15 months. Even on the other side of this pandemic, profit challenges will require faster and more targeted action in the supply chain to reduce waste and increase profitability. To address challenges during and post the pandemic, retailers should invest in tools and software that use advanced technologies such as machine learning and artificial intelligence to generate and update forecasts and recommendations on a daily or weekly basis. This will reduce waste in your supply chain, enable faster action in reaction to demand changes, and allow buying and planning teams to focus on other value-added tasks.

No doubt, these are challenging and uncertain times, but by taking the appropriate measures and making necessary investments, retail businesses will have a higher chance of navigating through them.

*Thanksgiving weekend draws nearly 190 million shoppers, spending up 16 percent, National Retail Federation.


If your business is pursuing growth, profitability, or operational improvements, the HighPoint Associates team has deep strategic and operational expertise that can help you design and implement a plan for future success. Contact HPA to start the conversation.

Abhinav Chandra is an Advisor at HighPoint Associates with more than 20 years of retail, consumer, and technology expertise. His background includes Head of Women’s Clothing (Amazon), Head of Customer Experience (Amazon), and Associate Partner in McKinsey & Company’s Retail Practice.