As a retail technology company obsessed with data, we at Tillerman are constantly looking at the trends and forecasts shaping the retail industry broadly. The start of 2022 continued to bring challenges with supply chain issues, inflation and of course Omicron having an impact, but there were bright spots as well. Heres a roundup of some of the retail stories that caught our eye this month.
August opened with a little good news for stores with a nice year over year increase in foot traffic thanks to some positive back to school traffic. Too soon to say whether this is a sign of better than expected performance, but at least it’s a bright spot! A report on July Retail Sales beat expectations with gains across most categories, indicating that consumers are still willing to spend and increasing hopes for a soft landing. There was also the news that Shein and Forever 21 are joining forces giving each brand new ways to reach the fast fashion consumer.
Earnings lead the news in the second half of August with the majority of companies reporting difficult sales and concern for the balance of 2023. Markdowns, shrink and a soft economy all contributed to disappointing results for Footlocker in Q2. Both top and bottom line results were down for Kohl’s in the quarter, but were consistent with expectations while the Wall Street Journal reported that Macy’s & DSG both suffered sharp downturns in their stock price following earnings that missed expectations. Despite a sharp decline in sales and a lowered projection for the year, Target shares jumped following their earnings report as the results were better than expected. Retail Dive had a roundup of DTC results reporting a mixed bag in the second quarter. Steve Madden reported revenue decreases, but they were in line with expectations as the company focuses on innovation, DTC and expansion of apparel and handbags. Nordstrom reported Q2 declines, but they were better than expectations, and the company was optimistic that they are seeing positive results from their current initiatives.
On the positive side of Q2 earnings reports, Wal-Mart beat expectations and is outpacing Target thanks to its non-discretionary product mix. Amazon beat expectations and delivered a big increase in share price as a result with cost cutting and efficiency as driving factors. PVH reported strong earnings and beat expectations as it continues its PVH+ initiatives while Abercrombie & Fitch beat guidance and raised its 2023 forecast.
In other news, CNBC reported that retailers have made progress committing to the 15% pledge to improve the representation of Black owned brands. They also reported on Target’s roll-out of Starbucks as a drive up service in all locations. In a tough climate innovation takes lots of different forms.
Finally on the tech side, Amazon is rolling out a generative AI tool to write summarized reviews which can be targeted to specific customers, and digital mannequins open the door to a more diverse shopping experience while giving retailers a chance to enhance their data driven understanding of their customer.