US retailers dodged a bullet with the unexpectedly speedy resolution of the strike at East Coast and Gulf Coast ports, which had threatened to hold up thousands of shipments meant to stock stores during the busiest shopping period of the year.
But though the fashion industry appears to have averted disaster, itâs still looking at the toughest environment around its most important season since the pandemic. Deloitte is predicting US retail sales between November and January to rise 2.3 percent to 3.3 percent to just under $1.6 trillion. Sales grew 4.3 percent in the same period in 2023, and 7.6 percent in 2022.
These low-single-digit increase predictions should be a warning for brands that were already struggling to hold consumersâ attention. Where there were mostly just winners in the holiday seasons immediately after the pandemic, that likely wonât be the case when people are watching their spending more closely.
It doesnât help that holiday spending will be packed into a shorter timeframe, as Black Friday falls on Nov. 29 this year, a full five days later than in 2023. Few retailers will be waiting until late November to appeal to shoppers. Boston Consulting Group estimates that 29 percent of holiday spending occurs in October. Amazonâs touting holiday deals that will start Oct. 8, and beauty brands flooded the market with Advent calendars starting in September.
This season will be a big test for mass-market brands like Gap that have invested new energy in marketing and refreshing their inventory. Macyâs, for instance, should be using this holiday season to showcase its new commitment to improving the in-store experience, and to see whether new additions to its product mix, including a relaunch of menswear and some trendier brands, will draw shoppers back to its stores. Many retailers set expectations low this summer, predicting consumers would be more conservative in their spending in the second half of the year.
Luxury brands, too, are headed into unfamiliar territory: itâs been nearly a decade since the categoryâs outlook was this grim. While ultra-high-net-worth shoppers are expected to spend as always, the aspirational consumer, who might save up all year for that holiday splurge, has gone missing. Some brands will be tempted to ramp up discounts to ensure those customers return.
For TikTok, it may be the platformâs last holiday season in the US if it doesnât win its legal battle to overturn a looming ban. You wouldnât know it from opening the app, though. This may also be a last hurrah for Shein and Temu as well; though neither marketplace is in danger of being banned, they might soon lose a key edge on pricing if the Biden administration closes an import loophole on low-value shipments from China.
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