US retailers attempt to stir excitement during shorter holiday shopping season

Nordstrom

27/11/2024 14:22

* 
      Retail chains offering Ray Ban augmented-reality glasses
and spa
services 
    

        * 
      Analysts see selective spending with more frequent 'price
check'
    

        * 
      Executives express caution for holiday season
    

        * 
      Retailers are stocking up customer favorites such as Nike
fleece
clothing and Hoka shoes
    

        * 
      High prices lead to selective purchases and potential
last-minute discounts
    

  
    By Siddharth Cavale, Ananya Mariam Rajesh
       NEW YORK, Nov 27 (Reuters) - To entice shoppers on Black
Friday, major retail chains intend to showcase interactive
products and experiences, including Ray Ban augmented-reality
glasses, extra-extra-large TVs at electronics retailer Best Buy
 BBY.N  and new spa services at U.S. department store chain
Nordstrom Inc  JWN.N .
But with a shorter holiday season, retailers also were stocking
plenty of basic favorites, such as Nike  NKE.N  fleece clothing
at Dick's Sporting Goods  DKS.N  stores, and On Holding  ONON.N 
and Deckers Outdoor's  DECK.N  Hoka sneakers at Nordstrom
locations.
A record 183.4 million people are planning to shop in-store and
online from Thanksgiving Day through Cyber Monday this year,  up
from 182 million last year, according to the National Retail
Federation, a U.S. trade group. Executives from five U.S.
specialty retail chains on Tuesday described plans to draw
people to stores. 
But executives at four retailers said in conference calls with
investors that either they - or shoppers - were "cautious" or
approaching the holidays "prudently." On the whole, retailers
anticipate the slowest growth in holiday season sales since 2018
as shoppers continue to wrestle with high prices.  
Shoppers are more likely to make only selective holiday-related
purchases rather than splurge. Telsey Advisory Group analyst
Joseph Feldman said shoppers will "price check" more frequently
before actually making a purchase.
    At Nordstrom, with 381 stores in the U.S., "we're hosting
experiences and events to celebrate the holiday, from virtual
events with fashion experts, to festive in-store experiences
across the country like letters to Santa, Holiday Glam Up Days,
the one-day-only Beauty Bash, and more," said President Peter
Nordstrom. His brother, Nordstrom CEO Erik Nordstrom, cited
slower October demand as a reason to keep expectations for the
fourth quarter in check.  
     
    SHORTER SEASON
    With just 27 days between Thanksgiving and Christmas — five
fewer than last year - retail executives are less exuberant in
their outlook. 
    "We did want to be appropriately cautious given the two
factors, one being just the uncertain macroeconomic environment
and then also the fewer holiday days," Lauren Hobart, CEO of
Dick's Sporting Goods, told investors in its third quarter
conference call on Tuesday. 
    "People are waking up and talking to it. I'm hearing even
people in my life talk about how, 'Oh, my gosh, Christmas is
coming.' They have to quickly accelerate the gift buying,"
Hobart said. She said Dick's, which has 864 stores,
strategically tweaked its inventory to stock more Nike  NKE.N 
fleece clothing, a popular basic, in a variety of sizes and
colors.
Clothing retailer Abercrombie & Fitch  ANF.N  lifted its
forecast for the holiday quarter, anticipating strong demand for
sweaters, jeans, knit bottoms, and fleece products at its Gen-Z
focused Hollister stores and millennial-focused Abercrombie
stores. 
    Best Buy CEO Corie Barry said the electronics retailer is
reintroducing both "Doorbuster" deals and a holiday gift ideas
section on its website, featuring curated gift lists that
include crafting and self-care products as well as travel and
gaming items. 
    It is adding displays of extra-extra-large TVs over 97
inches, Ray-Ban AR glasses and the new Oura Ring, which provides
personalized insights into sleep, stress and fitness, Barry
said.
     
    HIGH PRICES
Prices are somewhat high across a range of discretionary
merchandise from jeans to shoes to phones, making the typical
mall trip relatively expensive. Retailers that sell
non-essential merchandise including sports equipment, furniture
and home goods will have to lean on deep discounts, which could
erode operating profits, according to S&P Global Ratings.   
     "It is possible that consumers will wait until the last
minute to see if there are any bargains that emerge. If
retailers don't discount items, then shoppers might opt for gift
cards to help keep within their holiday budget," said Brian
Jacobsen, chief economist at Annex Wealth Management, which has
a stake in Walmart  WMT.N .
  
    Struggling department store retailer Kohl's  KSS.N  on
Tuesday provided a bleak outlook for the holiday quarter,
anticipating a larger sales decline than previously expected.
    Despite this, Kohl's said it had aggressive plans for the
holiday, with plans to expand product selection including
sweaters, fleece, stocking stuffers, toys, Sephora gift sets,
box jewelry, and cold-weather bedding from brands like Cuddl
Duds.
    Outgoing CEO Tom Kingsbury said Kohl's would leverage
influencers and social media marketing and lean into promotional
materials such as flyers based on customer feedback.
    It will also highly promote its Kohl's Cash rewards program
- where shoppers earn cash back on every purchase - and offer
more targeted promotions to its 4 million Kohl Rewards members. 
Nordstrom, in contrast, lifted the lower-end of its annual sales
forecast for the year. "The majority of the holiday season is in
front of us. We feel really great about ... our holiday plans,"
said CEO Erik Nordstrom. 
    "The consumer is bifurcated but so are companies," said
Jamie Meyers, senior analyst at Laffer Tengler Investments.
"Those that pivot win, and those that don't get left in the
dust."
  
      

(Reporting by Siddharth Cavale in New York and Ananya Mariam
Rajesh in Bengaluru)
((mailto:siddharth.cavale@thomsonreuters.com; Cell: +1
646-288-4330;))