Bain & Co. releases 2020 holiday shopping sales outlook

Darrell Rigby, Head of Global Innovation and Agile Practices at Bain & Co., joins The Final Round to discuss their new forecast for the 2020 holiday shopping season.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round." We're getting to the end of October. So you know what that means. The holidays are just around the corner. So what can we expect this holiday season? Bain is out with its annual holiday sales outlook. So for more on that, we want to bring in Darrell Rigby. He's the head of global innovation and agile practices at Bain, and also the co-author of "Doing Agile Right, Transformation Without Chaos." And we can see that right on the screen behind him.

Darrell, it's great to have you on the program. I think there are a lot of questions going into this holiday season, as we try to figure out just how big of an impact the pandemic is going to have on sales. Certainly, this holiday season is going to look and feel very different than any holiday season that we've had for quite some time. What are you expecting that we'll see in terms of sales?

DARRELL RIGBY: Well, we're surprisingly optimistic about sales. And a lot of people are surprised because there's so much talk about a retail apocalypse that everybody expects retail is going to be down 5 points or 10 points.

The truth of the matter is the holiday season has already begun. I think it began with Amazon Prime and Amazon Prime Day and a lot of other retailers having to respond to that. And so, actually, it began in October.

And I think it's probably serving to sort of flatten the curve of retail. Because we get this huge spike in November and December, but to the extent that Prime Day and all of its followers start dragging sales earlier into October, that has an effect. And to some extent, it sets people up in a shopping mood a little bit earlier.

But we're forecasting 2% growth this year, which is very similar to the growth that occurred in 2018. Not nearly as bad as I think a lot of people would expect. The problem is that average is kind of meaningless. Because if you're in some sectors, the growth is going to be 30%. And if you're in other sectors, it's going to be down 30% or 35%. So averages in a situation like this don't really mean, very much.

ANDY SERWER: Well, I'm curious about that. I'm going to ask you that question. I was going to ask you why women are so negative about the holiday season, but maybe we can get to that one, too. Because I saw that from your note, which is surprising, I guess. Maybe that's typical.

All right, let's stick with that one. I'll ask about sectors [INAUDIBLE] sectors next. I can't stop myself, Darrell. So women are negative according to your survey. Is this how they are always? Are they always Scrooge-like?

DARRELL RIGBY: [LAUGHS] They are never Scrooge-like.

ANDY SERWER: OK, yeah, careful.

DARRELL RIGBY: They are, of course, dominant in the shopping world. And they tend to be pretty realistic, I think. They understand what the family finances look like. And I think they're just expecting holiday gatherings are going to be a little tougher. And they're going to have to be a little more cautious.

They know they're going to have to do more shopping online. They got burned by some terrible online shopping experiences during the peak of the COVID pandemic. And I just think they're very realistic about what to expect this holiday season.

RICK NEWMAN: Hey, Darrell, Rick Newman. We're having these surprise shortages of things. I just learned this weekend that you can hardly get an outdoor patio heater right now. So are you expecting shortages of any particular types of items for the holiday season?

DARRELL RIGBY: Actually, we're expecting shortages of a lot of different kinds of items. There are problems getting things, and particularly from international markets. We're seeing a lot of appliances that are in short supply.

Some of the things that have been a little surprising is just how much demand we see for building supplies, garden supplies, home improvement projects. And people spending more time at home, they're spending more money to make sure that home is a comfortable place to be.

So technology and improving the home environment, anything related to that could be in very short supply. Building supplies, we're seeing lumber rates rise significantly. The inflation there over 100%, so yeah, lots of things in short supply.

And I think that's part of what is driving a lot of people to start shopping in October, to say, I don't know if we're going to be out of stock. And if they're in stock, I don't know if it's going to take two days or two weeks to get it here. So I've got to plan ahead.

SEANA SMITH: All right, Darrell Rigby, great to have you on. We wish we had more time with you. Head of global innovation and agile practices at Bain, we hope to have you back soon.

DARRELL RIGBY: Thank you.