Target and Apple expanded their relationship, tripling the number of Apple at Target store-within-a-store locations to 150 nationwide, Target said Wednesday. The shops have Apple-trained Target consultants and twice the space dedicated to Apple products, it said. As part of the expanded agreement, members of the Target Circle loyalty program have access to a four-month free trial of Apple Fitness+, with no purchase required, Target said. The retailer will also have special holiday offers on Apple Music, Arcade News+ and iCloud+, with some including up to five months free, also through Target Circle, it said.
Overstock was a “relative winner” during global supply chain disruption, being “well-positioned with commodity/unbranded products and plenty of selection,” Wedbush Securities analyst Michael Pachter wrote to investors on Monday. But the company “suffered from shifting consumer spending” on travel and entertainment post-COVID-19 pandemic, “while it exited all non-home categories,” Pachter said. Overstock will continue to be negatively affected by lower discretionary spending on home categories in coming quarters, but the company could gain share as demand for home goods rebounds, said the analyst. When supply exceeds demand and inventory is discounted, Overstock’s vendors absorb the hit and the company continues to be in a position to mark up the discounted merchandise and maintain its margins, he said.
Walmart said Tuesday it’s bringing back “Black Friday Deals for Days,” with a new twist: Events will begin on Walmart.com every Monday in November, “giving customers an exciting reason to look forward to the start of the work week.” Walmart is rewarding paid Walmart+ members with a seven-hour head start on scheduled start times for the three pre-Black Friday events, plus return pickup. The Monday Black Friday events begin online at 7 p.m. EST and continue in stores Wednesday of each week; the fourth November Monday, Cyber Monday, will have a separate event. Walmart promised “deeper discounts across electronics, home, toys, apparel and more,” highlighting Apple among tech brands. After supply chain and fulfillment issues plagued the industry in 2021, Walmart “has prepared for months to ensure strong inventory of in-stock Black Friday deals” during November, it said. The retailer will have a “streamlined” Black Friday destination online, including real-time pickup and delivery options.
The National Retail Federation urged the Biden administration Friday to enact policies to relieve inflationary pressure and lower costs for consumers, reporting September retail sales -- excluding automobile dealers, gas stations and restaurants -- were about flat with August and up 7.2% year on year. “While the Federal Reserve tackles long-term actions meant to end inflation, we believe removing China tariffs, enacting smart immigration reform to address the worker shortage, and increasing investments in supply chain resiliency can and will have an immediate impact on consumers and the economy,” said NRF CEO Matthew Shay. Going into the holiday season, shoppers are “increasingly seeking deals and discounts to make their dollars stretch,” and retailers are responding, Shay said. Households are “tapping into savings, accessing credit and reducing their savings contributions as they meet higher prices head on,” said NRF Chief Economist Jack Kleinhenz: “Shoppers are looking for bargains and value in the current economic environment and even more so as we head into the holiday season,” he said. “Consumer demand remained intact during September and continues to be a key contributor to economic activity,” Kleinhenz said, but sales were “uneven across retail categories” with inflation determining how much shoppers are willing to spend, he said. Electronics and appliance stores were the only category to post a year-on-year retail sales drop, falling 8.9% year on year and 0.8% vs. August, NRF said.
Physical stores are monetizable media assets for retailers, blogged eMarketer analyst Andrew Lipsman Wednesday, citing a “massive opportunity” amid the digitization of the physical store. Digital technologies allow retailers to provide dynamic, interactive media experiences at store shelves, end caps, cooler doors and checkout aisles, Lipsman said, noting the number of consumers shopping at stores “far exceeds those who visit ecommerce sites and apps.” In June, 212.4 million shoppers visited a Walmart store vs. 125.3 million for Walmart.com, he noted. “It’s easy to imagine brands getting excited about delivering ads close to the point of purchase where roughly 85% of retail sales occur,” he said. Advertising could help brands reach and influence consumers “at scale, during opportune moments, in brand-safe, contextually relevant environments,” Lipsman said, comparing it to traditional TV advertising. In stores, top retailers reach a mass audience every week, they reach the 18-to-49-year-old audience that largely doesn’t watch TV, and in-store shoppers are more likely to notice a brand’s ad vs. linear TV audiences that “second-screen” on phones during TV commercial breaks, he said.
Consumers are still spending despite becoming cautious amid an “unsettling” economic climate in the U.S., said National Retail Federation Chief Economist Jack Kleinhenz Monday. “Consumer confidence is down, consumer spending’s rate of growth has slowed, and economists and consumers alike are worried about the possibility of a recession, all reflecting persistently high inflation and rising interest rates,” he said. After saying in August the economy was “unlikely” to enter a recession this year (see 2208020067), Kleinhenz updated the view Monday, citing economists who say “a recession -- if there is one -- will likely be mild.” Some 38% of blue chip economists now believe the Fed will be able to rein in inflation without triggering a recession, vs. 51% in August, Kleinhenz said. The panel sees a 42% chance that a recession will begin this year and a 54% chance that it will begin in 2023. Spending growth slowed vs. 2021, “but households continue to spend each month as more jobs, wage growth and savings backstop their finances and help them confront higher prices,” he said. Consumer spending “held up better than expected” in August, with overall retail sales growing 0.3% from July, and 9.1% year on year vs. double-digit increases last year, Kleinhenz noted. Higher interest rates have driven up the cost of carrying credit card balances or financing a home or car, he said: “The combination of inflation and interest rate worries has consumer confidence at its lowest levels in years despite an uptick in September.”
Rising inflation has altered holiday gifting and spending plans this year, with 54% of U.S. consumers planning to spend less per person on gifts, 47% planning to buy discounted products and 38% reducing the number of people they’re buying gifts for, said a Monday Q3 Jungle Scout report. In a survey of 1,000 U.S. consumers, 84% of respondents said inflation affected their spending, up 9% from Q2, and 90% noticed higher prices in day-to-day spending. Some 52% of consumers said their household income is unstable, up 36% from Q2. Nearly 30% of consumers have started their holiday shopping; just 13% plan to wait until Thanksgiving or later to begin vs. 27% a year ago. Consumers are increasingly comfortable buying products via social media, the survey said, with TikTok having the most growth in potential shoppers. Boomers and millennials are most likely to buy products from YouTube; Gen Z opts for Instagram and Gen X consumers are most likely to buy products through Facebook, it said. Meanwhile, eMarketer emailed Monday that “storm clouds still hover over the holiday season,” despite higher consumer sentiment metrics from the University of Michigan, Conference Board and Gallup. Consumers are “wary of splurging and saving less money,” eMarketer said: “This won’t be a normal holiday season.”
Amid the protracted labor shortage, Walmart is shoring up staffing for the holiday season, saying Wednesday it plans to hire about 40,000 “for a great holiday season and beyond.” The staff adds are in seasonal and full-time roles for in-store and e-commerce shopping; full-time, permanent truck drivers; and customer care associates, blogged Maren Waggoner, Walmart U.S. senior vice president-field people. The retailer will prepare for the season by offering more hours on a temporary basis to current employees who want them, Waggoner said. The executive promoted Walmart benefits including 100% of the cost of college tuition and books through the company’s Live Better U program; skill development via Walmart Academies; medical coverage starting at $31.40 per paycheck; no-cost counseling sessions; paid time off and paid sick leave; and a 401(k) match and stock purchase plan for qualifying employees. The retailer’s U.S. average wage is over $17 an hour, she said. Amazon, meanwhile, expanded its Delivery Service Partners program, saying Wednesday it will contribute an additional $60 million to help small-business DSPs match employee 401(k) contributions. Amazon also launched Next Mile, an educational program that provides participating DSPs funding up to $5,250 per eligible driver per year for access to over 1,700 academic programs, including bachelor's and associate degrees, skill certifications, and high school completion courses. Amazon now supports participating DSPs in offering their drivers education and career advancement benefits and financial planning for the future, as well as business coaching and resourcing for DSP owners themselves, the company said. Next Mile will be available to drivers of participating DSPs beginning in January, Amazon said.
Participation in Halloween activities will return to pre-COVID-19 pandemic levels, with 69% of consumers planning to celebrate the holiday this year, vs. 65% in 2021 and comparable to 68% in 2019, said a Monday survey from the National Retail Federation and Prosper Insights & Analytics. Total Halloween spending is expected to reach a record $10.6 billion, up from a record $10.1 billion last year. “Social media is playing an increasingly important role in consumer behavior, and Halloween is no different,” Prosper Insights Executive Vice President-Strategy Phil Rist said. Consumers under 25 will look to platforms like Instagram and TikTok for costume inspiration, he said.
August sales through electronics and appliance stores were down 0.1% from July, seasonally adjusted, and 5.2% lower, unadjusted, from August 2021, reported the National Retail Federation Thursday. Overall August retail sales, excluding automobile dealers, gas stations and restaurants, were up 0.1% from July and 8% higher year over year, said NRF. Sales were up 7.3% year over year on NRF’s three-month moving average through August, it said. Sales were up 7.5% year over year for the first eight months of the year, on pace with NRF’s forecast that 2022 retail sales will grow 6%-8% over 2021, it said. “August retail sales show consumers’ resiliency to spend on household priorities despite persistent inflation and rising interest rates,” said NRF CEO Matthew Shay. “As we gear up for the holiday season, consumers are seeking value to make their dollars stretch.”