Wreaths and reindeer will make early appearances at retailers this year, and no wonder: Holiday sales—usually spanning November and December—represent roughly 20% of annual U.S. retail sales each year, according to the National Retail Federation. But a longer season doesn’t necessarily mean a better one.

Their collective shift toward a prolonged holiday period reflects pandemic constraints: Retailers want to limit crowding at stores, as do customers. And because delivery will take an especially important role this time around, spacing out shipping will help alleviate bottlenecks and surcharges. Shipping firms have said they would assess higher surcharges this holiday season: For


those surcharges take effect starting early November, while for


that starts mid-November.

All of that just leads to an ever-expanding holiday sales period.

“It used to be that Black Friday was the focal point of all holiday season—concentrated into a few hours of heavy shopping. Black Friday became Black Friday weekend, and then Black November,” according to Simeon Siegel, analyst at BMO Capital Markets.

This year, it will be Black October for some retailers:

Best Buy,

which typically kicks off holiday selling in early November with Black Friday ads, plans to move the season up to October. Many other retail names including Nordstrom,




as well as apparel brands such as

American Eagle Outfitters

have signaled a longer selling season.

While that could help retailers tackle logistical challenges, it also has the potential to create some pain. Lower-margin e-commerce has come to dominate holidays in recent years and will play an even bigger role this time around as shoppers avoid crowded stores. Promotions will be another drag: “The greater amount of time the retailer needs to fight for consumer dollars, the more reactive and promotional retailers will likely be,” notes Mr. Siegel.

One saving grace is that retailers have been disciplined with their inventory thus far because of the uncertainties of the pandemic. “A lot of retailers have planned conservatively to preserve cash and to avoid a highly promotional season,” notes Paul Lejuez, analyst at Citi Research.

Promotions could be especially painful for retailers that have performed poorly this year. Department stores such as Macy’s and Nordstrom, which historically rely heavily on holidays for a revenue surge, already suffered from falling gross margins over the past three holiday seasons. This is their time to shine after an otherwise tough year.

What seems likely is that recent winners will keep winning more market share through the holidays. E-commerce giants such as




will likely deepen their advantage. Big-box retailers stand to benefit too, and not just because of their e-commerce capabilities.

Many shoppers dropping by Walmart and Target to purchase groceries or other essential items this year also ended up picking up other goods to spare multiple visits, noticing that they could find apparel, toys, electronics and home goods there too. Both Target and Walmart captured shoppers’ demand for discretionary items following the initial essential stock-up phase in a way that department stores haven’t been able to, even though they made online and curbside pick-up available to customers. As long as the pandemic continues, shoppers will continue to prefer retailers that sell both essential and discretionary categories.

The exception might be specialty retailers such as Best Buy and

Dick’s Sporting Goods,

which not only benefited from selling in-demand categories for homebound consumers but already demonstrated an ability to defend market share against Amazon and big-box retailers.

Even trickier to predict is whether consumers will be in the mood to splurge. A booming economy generally corresponds with more holiday spending: While holiday retail sales have grown each year since 2002, the one exception was 2008, when holiday sales dropped 4.7% from the previous year in the midst of a recession, according to data from the National Retail Federation. A holiday surge isn’t hard to imagine, though: While the economic picture looks bleak, it is also true that people are spending less on experiences such as travel and dining out, which in recent years have come to dominate holiday spending dollars, according to Deloitte.

Not all retailers will get what they want this holiday season, but surprises will likely be in store for all of them.

Write to Jinjoo Lee at [email protected]

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