Retailers brace for a discounted holiday szn as folks hunt for bargains instead of big buys
Jingle-bell bargains… Retailers dropped some chilly holiday forecasts last week as the most wonderful time of the year got underway. Department store OGs like Macy’s, Nordstrom, and Kohl’s finally trimmed down inventory last quarter, but all three saw Q3 sales slumps. And yet off-price retailers including TJX, Ross, and Burlington Coat Factory topped expectations as cost-sensitive shoppers kept looking for discounts. About that:
One click: Cyber Monday (psst: today) sales are expected to jump 21% to $13.7B, outpacing Black Friday spend. Because sales started earlier this year, consumers said they’ll be done with 60% of their holiday shopping by today.
Long line: The holiday quarter is traditionally retailers’ most lucrative, but this year competitive discounts could weigh on bottom lines.
Half off perfume gift sets… for the whole fam. Retailers such as Macy’s, Target, Amazon, and Home Depot were rolling out promos as early as October in hopes that thrifty shoppers would use the savings to fill their stockings. They weren’t wrong: one survey found that 41% of consumers looked for coupons, discounts, or sales when holiday-shopping this year. Nearly a third started spending earlier. Meanwhile, October discounts were steeper and covered more items than the past four years. Because consumers are laden with a record $1T in credit-card debt and have dwindling savings, retailers are relying on aggressive deals to drive demand.
Shoppin’ small can still be big… Nearly 75% of holiday shoppers in the US expect to drop the same amount of $$ on gifts this year as they did last year — but now they’re demanding more bang for their buck. At the same time, stores like Macy’s hope that having an extra weekend to shop before Christmas will boost last-minute hauls. While holiday spending could hit a record $966B, it’s the slowest pace of growth in half a decade.