Father’s Day 2020 will be the first shopping holiday on the US retail calendar to test the strength of consumer demand post lockdown. Father’s Day is celebrated on the third Sunday of June, meaning it falls on June 21 this year. With Covid-19 lockdown restrictions in the US now being eased, nonessential retailers are beginning to reopen stores, but social-distancing requirements may still inhibit in-store shopping—and there is likely to be some degree of consumer resistance to even visiting brick-and-mortar stores.

The Holiday in Context: A Covid-19 Backdrop but Increased Optimism

Consumers had limited options to celebrate Easter and Mother’s Day, as shelter-at-home orders were in place and nonessential businesses were shut as a result of coronavirus lockdowns. As a result, we estimated deep declines for spending on those events. However, many US state governments have now allowed businesses to reopen, including retail stores and restaurants, but with reduced capacity or curbside pickup only. Retail stores in states including California, Colorado, Florida, Georgia, South Carolina, Tennessee and Texas are allowing in-store shopping (some with capacity restrictions). We will see more retail stores reopen by Father’s Day, providing greater opportunities for in-store shopping. With the easing of restrictions, consumers appear to be slowly regaining their optimism. The US Consumer Confidence Index increased slightly to 86.6 in May from 85.7 in April, according to The Conference Board—the first rise after two months of decline. We are therefore more optimistic for Father’s Day spending, and we think that consumers are looking forward to celebrating Father’s Day with more enthusiasm compared to the previous holidays. Nevertheless, we still expect total Father’s Day spending to fall compared to 2019, due to the impacts of Covid-19. Prior to the coronavirus crisis, Father’s Day had seen increasing consumer spending year over year, with 70% growth between 2009 and 2019, according to data from the National Retail Foundation (NRF). We estimate Father’s Day spending to total $13.6–14.3 billion this year, versus the $16 billion that the NRF estimated for 2019, implying a 10–15% decline in total spending across services and retail. Our estimates factor in substantial declines across various retail categories, including clothing and accessories, electronics and sporting goods, plus a sharper decline in nonretail services such as restaurants—many of which may still operate with much-reduced capacity or simply see caution from consumers about using these services.

What Retailers Can Do To Encourage Consumers To Shop for Father’s Day Gifts

Clear Inventory with Multibuy Offers Retailers can look to clear excess inventory and recover sales for products that they could not sell during the lockdown by launching multibuy promotions in seasonal categories such as apparel and footwear—for example, “buy one get one free” or high-percentage discounts on a second product when you buy one. Provide DIY Kits for Activities That Allow Fathers To Impart Skills to Their Children Home-improvement retailers can put together DIY (do-it-yourself) kits that allow fathers to participate in an activity with their children and even teach them skills—including carpentry or gardening. The coronavirus crisis has changed personal priorities for many consumers as health concerns take precedence, so a focus on family experiences may be appealing. Encourage Deferred Gifting for Experiences Retailers or service providers could sell gift cards for experiences—such as spa treatments or grooming services, a day at a golf course, a luxury sports car driving experience or a steak dinner, to name a few. This would drive sales for retailers while recognizing that consumers may be apprehensive about going out freely in the first few weeks post lockdowns. Extended redemption periods would further encourage shoppers to buy gift cards, as there is little pressure to commit to booking the experiences in the short term. Inform Consumers about Safety Measures within Stores Although stores have begun reopening with restrictions, some people could still be concerned about shopping in stores. Retailers can emphasize and educate customers about the health and safety protocols that are being implemented in their stores, to allay the fears that shoppers might have of being in close proximity to others. Drive Engagement and Participation through Social Media Retailers could launch online competitions to drive engagement with their existing customer base as well as attract new customers. Furthermore, in unprecedented times like these, retailers may leverage the digital channel to instill confidence among consumers by conveying optimistic messaging on social media platforms through images or videos. Such content can leverage the family associations of Father’s Day, with a focus on appreciating the role that fathers play in people’s lives or simply looking ahead and emphasizing that life will soon return to some semblance of normalcy. Being empathetic with shoppers should help the retailer to differentiate themselves from the competition and build a customer base that will stay loyal beyond the crisis. Promote Self-Gifting Retailers could leverage the theme of the holiday to promote self-gifting, such as by inviting fathers to a special “treat yourself” sale, exclusively for men—providing them an opportunity to purchase products at discounted prices. Retailers could also look to launch a “treat Dad and yourself too” promotion to encourage shoppers to purchase items for themselves in addition to Father’s Day gifts. Highlight Themed-Gift Baskets for a Special At-Home Experience Retailers could promote Father’s Day gift baskets, in which different products are combined into one package—for example, a “BBQ Party” basket with sauces and grilling tools for a barbeque meal with family at home, or a “We Care” basket that contains a collection of personal care items.

What We Think

As lockdown restrictions are relaxing in the US, consumers could be looking forward to celebrating Father’s Day with more optimism. Retailers should look to offer multibuy promotions, flexibility in deferred gifting or special experience packages so that shoppers have greater choice—not only in selecting purchases but also for consumption of the gifts. Increased US consumer confidence hints at more people celebrating Father’s Day compared to Easter and Mother’s Day, which were celebrated during the lockdown. Retailers could use this opportunity to clear excess inventory and make space for fresh, in-season stock—gradually making up for the “lost” shopping days this year caused by Covid-19.