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The peak holiday shopping season is set to start early, last longer, and will be marked by a second e-commerce surge that will shatter previous records for online sales growth, according to research from commercial real estate giant CBRE, released Wednesday.

CBRE Research titled its 2020 U.S. Holiday Trends Guide “A Holiday Shopping Season Like No Other,” emphasizing the strength of consumer spending in driving the U.S. economic recovery but also pointing to the headwinds of global uncertainty and fears of a second surge of coronavirus infections. The report calls for holiday retail sales growth of less than 2% this year barring any pandemic-related retail lockdowns—a figure well below the 4.1% annual average increase since 2010. It also highlights four key trends that will shape this holiday shopping season, ranging from slower store sales to demands for balancing safety and the “holiday shopping experience” in physical retail stores.

First, the research points to slower brick-and-mortar sales, driven largely by the pandemic’s influence on the economy and reduced foot traffic in stores as shoppers choose to buy online. The decline will be offset by accelerating e-commerce growth, which the researchers say is set to reach unprecedented year-over-year growth of at least 40% in November and December.

Second, researchers point to a longer holiday shopping season, which will begin with Amazon’s Prime Day event and similar promotions from traditional retailers this month. Retailers will try to spread out demand to prevent overtaxing their supply chains and control crowds as consumers seek early deals, they said. 

“[2020 will be] the longest holiday season we’ve seen,” Meghan Martindale, CBRE’s global head of retail sales, said in an online preview of the report Wednesday.

The third key trend is the e-commerce surge, which will follow the lockdown-related surge of this past spring. Martindale said the expected 40% increase in online sales this season “shatters previous records”—it’s more than double the record growth set last year—and will require careful preparation in order to manage inventory and control shipping and delivery costs. Her colleague, John Morris, added that the shift to e-commerce will eat into retailers’ margins and profitability simply because it’s more expensive to conduct e-commerce. It costs retailers more to deliver “a box to the door rather than a pallet to the store,” as one example, said Morris, CBRE’s executive managing director and industrial and logistics retail leader for the Americas.

The fourth trend that will shape this holiday season? “Reimagining” brick-and-mortar retail in the age of Covid-19. Retailers will need to get creative in order to address health and safety concerns while also maintaining the “festivity and excitement of the holiday season,” the researchers said. Strategies include maximizing “in-and-out” shopping, which means engaging shoppers with merchandise and sales associates in the store while pushing other activities out of the store. Vacant retail spaces, kiosks, common areas, and outdoor space on sidewalks and parking lots will be used for payment, to purchase gift cards, gift wrapping, and returns, limiting in-store activities. Such strategies will be especially important for smaller retailers that lack a solid e-commerce infrastructure, the researchers said. Martindale added that smaller retailers are likely to turn to third-party logistics services (3PL)  providers for outsourced fulfillment and to manage other aspects of their omnichannel business strategies.

Longer term, Morris said he expects a continued transformation of physical retail space. Over the next 12 months, he said retail shopping malls will increasingly add logistics components to their operations, including fulfillment centers that are either adjacent to or integrated with existing facilities.

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