Why Retail’s Key to Survival May Be a Hub Model
Where the Consumer is the Pilot
The year 2020 was an unprecedented test of adaptability for brands and retailers and a year that transformed consumer behavior. Retailers including Target TGT +0.9%, Nike NKE +0.5%, Williams Sonoma WSM +3%, and Best Buy BBY +3% (to name a few) have all called out years of digital transformation plans accelerated into months.

Consumers also adapted their behavior at an accelerated pace and will be more fluid in their transitions between online and offline in 2021 and beyond. With elevated expectations for a seamless shopping experience, consumers now demand flexible fulfillment, personalization, safety, and sustainability as the price of entry into their wallet.
FDRA's National Shoe Sales Reports 
US Shoe Store Retail Update
Starting from a broader perspective, after a disastrous spring, overall retail demand extended its rebound in November as retailers and shoppers alike adjusted to the new retail environment in the era of COVID-19. Retail sales rose a robust 4.1% year-over-year in the latest month, higher for the sixth straight month following three earlier months of steep declines this spring. The US Census Bureau is reporting sharp sales declines at restaurants and bars (down -17.2%) and gasoline stations (down -17.1%) that weighed on overall retail sales in November. 

Canadian Shoe Store Retail Update
Starting from a broader perspective, after contracting sharply over recent months months, overall retail demand grew for the fifth straight month in October, jumping a seasonally-adjusted year-over-year 7.5% in this latest month, the biggest advance in three years and a welcome improvement from sharp contractions noted earlier this year. All thirteen of Canada's provinces and territories posted gains in retail demand from twelve months ago, another welcome improvement after a dismal spring. And nine of Canada's eleven main retail sectors enjoyed increased sales, with a few seeing the biggest gains in several months. 
 
US Shoe Store Employment Fades Again, But Not for All Workers

While shoe store employment struggles to regain its footing and right-size to meet retrenched sales, an interesting evolution within the sector’s workforce is at play. Recently the US Bureau of Labor Statistics (BLS) reported its latest read on America's labor market, indicating the country lost 140,000 workers, the first monthly drop since the spring. Indeed, this contraction follows five straight months of decelerating growth in employment, strong evidence that the economy is faltering from the pandemic.  

Pandemic Weighs on Prices for ‘Non-Essential’ Items Including Footwear


Just as the pandemic has caused retail demand for some goods and services to jump while demand for others has waned, a similar divergence is evident in prices across different retail sectors this year. Recently the federal government reported its latest read on U.S. consumer prices, including retail prices for footwear.  

How ‘Buy Now, Pay Later’ Services Became a Savior
for Retail This Holiday Season
In a pandemic-plagued shopping environment, millions of Americans sought to stretch their dollars and avoid debt by using “buy now, pay later” services — and that might’ve helped rescue retailers this past holiday season.

Offered by companies like Afterpay, Klarna, Quadpay and Sezzle, “buy now, pay later” allows customers to make purchases via installment plans over the course of weeks or even months, rather than immediate in-full payments. Although it’s been around for years, experts have suggested the recession spurred by the COVID-19 health crisis has accelerated the use of the service — which can not only mitigate buying stress for consumers living paycheck to paycheck, but also prevent retailers from having to significantly discount merchandise as they see a pullback in discretionary spending.

Walmart and Amazon Launch Return Options as Some
Predict Holiday Onslaught
In a year of extreme e-commerce growth, which has stretched logistics networks across the industry during the holiday season, expect an extreme amount of holiday returns. 

Salesforce has estimated there could be around $280 billion worth of returns this holiday season. That is to be expected amid record online holiday shopping this year. It's also an effect of consumers avoiding physical stores amid the pandemic and so losing the ability to browse in person. 

Moreover, "bracketing" — where customers buy multiple versions of the same item to test them out at home — has been on the rise since the pandemic began. According to Narvar, which has developed shipping and returns platforms for merchants, 62% of consumers reported bracketing this year, a 50% increase over the past three years.