Some retailers are reportedly reexamining their promotional strategies to stave off a muted holiday season.
“It’s our Super Bowl,” Tapestry finance chief Scott Roe said of the holiday shopping season in a Wall Street Journal report that looks at the phenomenon.
Roe — whose company owns Coach, Kate Spade and Stuart Weitzman — told the WSJ the company’s primarily direct-to-consumer business gives it a good idea of where promotions might work.
The study also mentioned recent remarks made by Bath & Body Works stating that, although it doesn’t anticipate being more promotional during the holidays than it was the previous year, it is refining its promotional strategy using data.
The announcement coincides with recent economic figures indicating mounting pressure on consumers. Retail and food service sales declined in October for the first time in seven months, according to official data on consumer spending. Sales at department stores decreased by 1.2 per cent, however, sales on eCommerce were the same from month to month.
Additionally, the results supported the dire predictions of two enormous retailers on a decrease in consumer purchasing. During an earnings call, Walmart’s management mentioned that October’s consumer spending slowdown resulted in a cautious forecast for the rest of the year.
According to Target CEO Brian Cornell, “consumers are still spending overall, but they are being forced to make trade-offs in their family budgets due to pressures like higher interest rates, the start of student loan repayments, increased credit card debt, and decreased savings rates.”
Additionally, buyers are trying to use buy now, pay later (BNPL) arrangements to reduce the cost of purchases if they are not willing to make any compromises.
According to PYMNTS Intelligence statistics, 40.5 million Americans, or 16 per cent of all consumers in the country, utilised BNPL during the previous few months. According to the data, 16 per cent of BNPL users used the option at least once a week, and another 25 per cent did so once a month.