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Retail begins to reckon with a holiday season where lockdowns loom and digital could dominate.

It’s hard to believe we’re here, but the holidays and their associated retail calendar fixtures are not far off. In China, Golden Week is about a fortnight away, Amazon’s Prime Day is looking likely to fall in October after being pushed back from its usual slot by the pandemic, and then Thanksgiving, Black Friday, Christmas and other celebrations and observances are going to come in hot on their heels.

This was always destined to be a holiday shopping season like no other. Almost nobody holds living memory of another winter where most of the globe was gripped by a virus. And even if they did, our multi-channel reality means that when it comes to predicting how, where, and on what shoppers are going to spend money, there’s no precedent to point to.

But just how mould-breaking this holiday season will be is also going to depend on where you are in the world. Here in the UK, and across much of Europe, COVID cases are on the rise. There are already mutterings of a second national lockdown – form to be confirmed, but retail is sure to be affected – and that has already become a reality in Israel. And the United States keeps on passing one grim milestone after another.

Contrast this with China, where retail sales have this week passed their equivalents in 2019, and where a broader economic recovery is being driven by both industry (i.e. exports) and consumption.

Those top-level economic statistics may be misleading, given that retail has only just returned to year-on-year improvement, and ongoing trends are hard to infer, but based on the most immediate indicators, we have markets in South and Southeast Asia where COVID is all but absent and retail sales are picking up, and markets in the Western hemisphere where people cannot be sure they will even be allowed to go shopping in a few weeks’ time.

Ignoring the fact that this lopsided recovery is tilting the economic balance towards China even further than pre-existing forces were doing, conditions are also conspiring to rob retailers of brick-and-mortar channels again – after they were given only scant time to establish or ramp up plans for eCommerce, social commerce, kerbside pickup and other channels.

This was not unforeseen, of course. A survey conducted earlier this summer revealed that 85% of retailers predicted an increase in online shopping this winter, and new predictions released this week support the idea that this holiday season will drive mobile commerce – including social commerce – to new heights. And the summer survey also revealed that more than half of retailers were planning to invest in improving their eCommerce and social commerce capabilities.

But a few months is not a lot of time to conduct any large-scale implementation or expansion, so even those businesses that had a new eCommerce platform in their sites may find themselves rushing to get it live. Staff shortages, queues to checkout, product shortages and overstocks of out-of-season styles… these are all fresh memories for shoppers and retailers, and depending on how quickly the much-discussed “second wave” descends on Europe and the USA, they could be returning to haunt the industry again.

Anecdotally, The Interline knows several people who have not just stocked their garages with non-perishables in anticipation of another lockdown – they have done their Christmas shopping already, to get ahead of an expected eCommerce rush and a shortage of products. Beyond the raw statistical level, the idea is already out there.

There is, then, a lot riding on this holiday season. Beyond the usual competition, this holiday season could be a matter of survival for as many as one in five retailers. And worryingly, according to the same study published this week, more than half of retailers had not yet embarked on their holiday preparations.

Stack this against Amazon, which has hired 30,000 tech workers, and is targeting a new round of warehouse and operations workers to take its total pandemic-capitalising recruitment to nearly a quarter of a million between April and Christmas. It will not be a surprise if the eCommerce leader uses this holiday season as an opportunity to dominate the online space even further, leaving other retailers squabbling over increasingly small slices of the remaining pie.

Amazon is, to be clear, by no means the only online retailer being buoyed by the idea of an eComm-native holiday season that other retailers are struggling to prepare for. This week saw The Hut Group (a prominent online player from The Interline’s home town of Manchester, UK, across several sectors) go public in the UK’s largest IPO in the last five years, and its shares have since risen almost a third on the back of that $7 billion valuation. This listing reflects wider market sentiment around the dominant role that distance selling through digital channels is going to play in the fourth quarter of this year and beyond.

image from amazon media vault.

But we aren’t finished with Amazon just yet. This week also saw the heavily-rumoured “luxury stores” open their online doors through invitation only. Present at launch are Oscar de la Renta and Roland Mouret, the latter of whom summed up the business rationale behind foregoing the second digital London Fashion Week, and instead launching a new collection directly through Amazon by saying: “We are all Amazon customers now“.

Mouret, though, said something else that we consider far more revealing, saying that fashion’s own legacy of over-creation and over-consumption had created a “monster” and intimating that Amazon was simply stepping in to fill the void.

But this attitude hides a more insidious subtext; if this holiday season demonstrates that people will buy luxury through online marketplaces, and proves that those marketplaces are the only places to be able to offer smooth service and full inventory at a time of crisis, it could add even more weight behind the idea that physical retail has fallen too far behind the times to remain relevant. And big tech’s vision of digital – with all its potential and all its faults – could go on to dominate even further.

In that context, we could be getting ready to replace one monster with another.