For fashion retailers, it’s the moment of truth: when they open their doors on the Friday after Thanksgiving, the number of shoppers who pass by and what they take out will play a big role in setting expectations for fashion. coming year. So far, the outlook has been unusually volatile: Holiday shopping forecasts have ranged from bleak to cautiously optimistic. Retail sales have repeatedly defied decline forecasts. Inflation remains high, but has shown signs of moderating; the US economy continues to grow. Retail earnings in the third quarter were a real mixed bag.
The four-day period between Black Friday and Cyber Monday will determine which narrative will prevail. More than this year’s sales targets hang in the balance: Retailers have misjudged consumer demand on several occasions during the pandemic. They don’t want to make that mistake again and will look at holiday spending to determine their orders for next year. The danger is ending up with too little inventory if consumers decide to push their way through a mild recession, or being stuck with a glut of unsellable goods in the event of a severe recession. Fashion won’t have the supply chain to blame this time around: for the first time since the pandemic, retailers big and small are saying they can get what they need, when they need it.
Retailers rely heavily on discounts to attract buyers. Many stores rolled out “Black Friday” discounts in October. Amazon and Alibaba also held sales events. The results weren’t exactly encouraging: Amazon’s Prime Day in October pushed sales up just 15% from a typical week, well below the usual spike, according to Earnest Research. Alibaba’s Singles Day sales rose 8.5%, the lowest increase since the event was introduced. Placer.ai saw a lower than usual increase in foot traffic in October despite all the early sales. On Thursday, Macy’s said sales fell around the start of November, though they have since recovered again.
All of this could mean that consumers are simply waiting for better Black Friday deals. Or they may signal that they intend to stay entirely at home. Macy’s CEO Jeff Gennette discussed both possibilities in an interview with CNBC last week, saying, “Is this a downturn in consumer confidence that we’re going to experience through the fourth quarter? Or does it go back to the shopping habits of 2019 when those weeks I quote were actually in line with the trend we had before Christmas this year? Right now we are watching it very carefully. »
The same goes for many other retailers. This week we will have our answer.
What else to watch this week
The World Cup begins in Qatar
Urban Outfitters Announces Quarterly Results
American Eagle, Abercrombie & Fitch and Nordstrom Announce Results
Eurozone announces consumer confidence for November
Dr. Martens reports the results
black friday shopping holiday
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