What executives expect for the holiday season
Christmas Eve is just two months away, and retailers are facing a more cautious customer offering deals sooner.
Most retailers won’t report third-quarter results or updated holiday expectations until before Thanksgiving, widely considered the industry’s most important week of the year. By then, most shoppers will have started checking off their holiday shopping lists.
Amazon’s The October Prime Day sales event and competitors’ earlier-than-usual Black Friday deals are taking away some of the holiday wallet share. The unofficial start of the holiday shopping season comes as executives point to a bifurcation in consumer spending, low-income consumers are feeling pressure on their budgets, and government shutdowns and tariff costs threaten purchasing power.
Kohl’s is among retailers chasing holiday shopping early in hopes of boosting overall sales.
“We want to make sure we provide that early consideration, knowing they’re shopping early,” Kohl’s Chief Marketing Officer Christie Raymond said at a media event earlier this month.
The store outside the mall is starting its holiday marketing campaign next week, a week earlier than last year when it waited until after the election. Other holiday products that are not yet available in stores will also be released in the coming days.
A key part of Kohl’s holiday strategy is to catch shoppers often, not just early.
During the last holiday season, between November and January, shoppers made an average of “15-plus trips” to stores across the industry, but with smaller baskets, Raymond said. These findings were based on a survey Kohl’s conducted with a third-party research firm.
“[Consumers are] “They work to get what they want at the price they want to pay,” he said.
During Academy Sports and Outdoor Fields CEO Steve Lawrence acknowledged that shoppers are savvy about price monitoring and said he expects customers to “center their spending around key shopping moments on the calendar where they know they can get the best deals.”
Both Kohl’s and Academy Sports appeal largely to middle-income customers. Still, Lawrence said consumers pay close attention to discount events.
“If we run the same promotion this year as we did last year, the take-up rate will be higher,” he said. “I think it’s a sign that customers are really savvy and have figured out when is the right time to shop.”
We are changing shopping habits
While promotions are part of every holiday season’s playbook, Academy Sports will change how it implements discounts this year in light of greater participation in deals, Lawrence said.
“If we ran a promotion for 10 days last year, maybe I’m only running it for 4 days over Thanksgiving weekend,” he said. “Maybe instead of promoting an entire brand, maybe just the main categories of that brand, right? Or maybe in some cases, it might be promoted at a slightly lower discount.”
Kohl’s is seeing shoppers turning to lower-priced options, Raymond said, and he expects that to continue into the holiday season.
“Customers were maybe buying a premium brand, but we’re seeing them gravitate towards specialty brands,” he said. “We actually think we’re in a great position to take advantage of that.”
A private label is a brand produced and sold exclusively for a single retailer; allowing greater control over design and, more importantly, cost. This can mean lower prices for shoppers and higher margins for the retailer than a national brand.
Shoppers carry Macy’s and Nordstrom bags at Broadway Plaza on Monday, December 16, 2024 in Walnut Creek, California, United States. The Bureau of Economic Analysis is scheduled to release personal spending figures on December 20.
David Paul Morris | Bloomberg | Getty Images
While Kohl’s does not disclose the percentage of its private label sales, Chief Merchandising Officer Nick Jones said it is not as high as it used to be, adding that there is an opportunity to increase that share this holiday season, especially for customers looking to stretch their wallets.
About 23% of Academy Sports’ business is private label, the company said.
“In many cases, [our private label] “This is our best expression of value,” Lawrence said. “Our goal is to be at the best price or better on a given day.”
But Lawrence said innovation must continue to inspire sales.
‘Cautiously optimistic’
The retail industry has repeatedly described its customers as “picky” in recent quarters; This shows that the expenses are thoughtful and at the same time “durable”. Managers continue to use these descriptors or synonyms for the upcoming holiday season.
“I think inflation in certain categories certainly puts some pressure on spending power,” Lawrence said. “But, you know, we’ve also found that customers are very resilient. They go out during important shopping times. They go out for Mother’s Day, Father’s Day, back to school. We think they’ll go out again for the holidays.”
Dick’s Sporting Goods Chief Executive Ed Stack told CNBC this week that he thinks consumers are “a little bit stressed” this season but is “cautiously optimistic.”
“If you’re going to provide value to the consumer, and they can see that, they can feel that value — and I don’t mean in terms of price, it can be innovation… then they’re going to come and buy,” Stack said.
Executives at all three retailers agree that holiday stock positions will be normal, despite tariff uncertainty that many fear will impact order volumes. None of the three expected a shortage of goods.
“I don’t think so [inventory availability] It’s going to be different than it has been in the past,” Stack said. “Is it really a hot product that everyone wants? “There will probably be a supply shortage, like every year.”
