By Phil Wahba November 22, 2017

It’s show time for major U.S. retailers.

Big chains, from Walmart (WMT, -0.11%) and Macy’s (M, +1.05%) to Abercrombie & Fitch (ANF, -0.06%) and Gap Inc (GPS, -1.78%), are ready to face their biggest test of the year: Black Friday. It’s one for which they’ve been planning for almost 12 months, and one that will show who has learned their lessons from retail’s current earthquake—and who hasn’t.

Over this Black Friday weekend, which really kicks off on Thanksgiving and concludes on Cyber Monday, Nov. 27, as many as 164 million Americans will hit stores or shop online, according to data from the National Retail Federation. On Friday alone, some 115 million people will go Black Friday shopping. This is many retailers’ chance to show that their investments in e-commerce, store improvements and better merchandise in the last year are enough to keep them thriving. While the weekend doesn’t always reflect how the rest of the holiday shopping season will turn out, it gives everyone a first gauge on where shoppers are going and what is working for retailers.

During the most recent corporate earnings season, countless retail CEOs invoked a “tough retail environment.” But in reality, the big chains have rarely had this much wind at their backs: unemployment is low, wages are finally inching up, consumer confidence is high, as is the stock market. Indeed, the National Retail Federation is forecasting that retail sales in November and December should rise between 3.6% and 4% this year.

In other words, it’s on retailers if they blow it this Christmas period.

To be fair, there have been so many bankruptcies and store closings this year, that there is a ton of pressure on many chains from rivals still conducting clearance sales. Nonetheless, large-scale closings by chains like J.C. Penney (JCP, +0.47%) and Macy’s have already occurred. In the last few months, the big chains have worked to improve how stores and e-commerce interact so they can leverage their physical properties against Amazon.com (AMZN, +1.46%). They’ve gotten better and managing inventory so as to find the middle ground between not overloading store floors with stuff, but having enough on hand not to lose a sale, whether online or in-store.

Let’s have a look at what some of the biggest traditional retailers have to prove this weekend.

Walmart

Walmart, the behemoth now playing a unfamiliar role of underdog to Amazon despite its enormous size, has been making enormous strides in its e-commerce this year. But Walmart is also making clear it will wage a price war as warranted. Visits to Walmart stores have risen for 13 straight quarters as a result of simply making them look better and improving areas like store pick-up of online orders. Walmart’s shares are at all-time highs (as are Amazon’s) as a result. Now the discount chain has to show it can keep its momentum as everyone from Amazon to smaller rivals raise their e-commerce and store game.

Target

Unlike Walmart, Target’s grocery business is still struggling to find its way. And it’s a smaller part of Target’s overall revenues, meaning it doesn’t generate shopper traffic as reliably. So Target has been betting on aggressive pricing to go toe-to-toe with Walmart and Amazon, but at the same time is showcasing its popular house brands like Cat & Jack and Pillowfort, young brands that have taken off in a big way.

Macy’s

As Fortune details in its current issue, Macy’s is in the midst of its first holiday season under new CEO Jeff Gennette’s turnaround plan, which includes tidier stores that focus more on special products and less on ubiquitous sales signage, as well as a newly relaunched loyalty program that lavishes goodies like free shipping on top vendors. While the expectation is for a 12th quarter of sales declines, Black Friday weekend will be many shoppers’ first real interaction with Macy’s as it reinvents itself, and will show whether recent green shoots are anything sustainable.

J.C. Penney

The struggling department store chain’s turnaround is hanging by a thread, but J.C. Penney recently reported a decent third quarter for sales. Still, J.C. Penney is opening stores on Thanksgiving a full three hours before its immediate rivals, showing how desperate it is to win sales, even at some risk to its profit margins. But it still has to contend with how unpopular much of its merchandise is, notably women’s apparel, its biggest single category. And J.C. Penney is also wading into the holiday season without a chief merchant, having eliminated that role only last month. With shares near all-time lows, J.C. Penney has to show its efforts can gain traction. And department stores, very apparel centric, could face big challenges: Jefferies said in a research note this week that discounts are bigger this year in clothing than last year.

Kohl’s

With most of its stores off-mall, Kohl’s has been spared many of the problems afflicting Macy’s, J.C. Penney and Sears. And Kohl’s has been inventive in seeking to return to real growth (comparable sales rose 0.1% last quarter, hardly earth-shattering) with moves like partnering with Amazon at about 80 of its stores, and by launching its Black Friday deals earlier. This holiday season will give the company, and its investors, a first read on whether such initiatives are insane, or insanely savvy.

Best Buy

Best Buy, the electronics chain, has proven it can withstand competition with Amazon and Walmart. But the holiday season is particularly bruising for its category, and last holiday quarter, Best Buy’s results were underwhelming. Since then, it has launched initiatives like expanding space at 700 of its stores to better showcase Amazon’s Echo as well as Google Home.

Toys R Us

Toys R Us filed for Chapter 11 a few weeks ago, and the holiday season will be key in showing how viable its business is, down to the store level, as it plots its exit from bankruptcy protection. The holidays will show people whether Toys R Us has lost clout with vendors and whether it is able to begin to counter the likes of Amazon, Walmart, Target and even a new encroachment by J.C. Penney, to win back customers.

The Gap and Abercrombie & Fitch

Both mall stalwarts are showing signs of life, evoking the idea that maybe specialty apparel retailing can thrive again, after all. The Gap (part of Gap Inc (GPS, -1.78%)) recently broke a multi-year streak of comparable sales declines, while A&F’s (ANF, -0.06%) namesake brand is getting closer to ending its losing streak. (Both chains have sister chains that are killing it, Old Navy and Hollister, respectively.) They will have a chance to show that efforts to improve quality, and be quicker to jump on new trends, are working.

Source: FORTUNE