Industry predictions for holiday sales this year are more tempered compared to the last few years of gains. Deloitte recently forecast retail sales to increase 4% to 6%, to between $1.45 trillion and $1.47 trillion, for the November to January holiday period; this compares to a 15.1% gain in the same period last year.
Both retail giants have admitted to feeling the pressure. Walmart gave a less dire annual forecast in August, after cutting its annual expectations twice. In July, CEO Doug McMillon said the company was “now anticipating more pressure on general merchandise in the back half” of the year. In August, Target stood by its full-year profit forecast but said it was “planning cautiously for the remainder of the year.”
Deeper savings and ‘Deal Days’
Experts say retailers will be in a more promotional mindset in their messaging—they’ll focus on price and drive home value as they try to capture a share of people’s spending. Marketing from many chains might be focusing on their own private label brands, since such products will deliver greater margins for retailers, said Steve Dennis, president and founder of retail consultancy Sageberry Consulting.
“When you get to an environment where consumers are more price-conscious, that tends to shift to stronger value messaging,” he said. With private label, he added, retailers might give “the idea that those offer more value, more bang for your buck than a national brand.”
Now, along with promoting “deeper savings,” Walmart is focusing on convenience for time-strapped customers. The Bentonville, Arkansas-based chain is offering an extended holiday return policy for its items, which it dubs the catchy “no concerns” returns. Purchases made on or after Oct. 1 can be returned through the end of January, Walmart announced this week. Its Walmart+ members will get the added perk of pickup from home of returns on certain items as well.
With its Deal Days, Target is already leaning into price, touting discounts on electronics such as TVs and computers as well as home items including coffee makers and pressure cookers. The retailer is also extending its price matching from Oct. 6 through Dec. 24—last year the offer began on Oct. 10.