The third quarter was a hard one for many US retailers, as inflation, supply chain strain, and more normalized post-pandemic consumer behaviors set in. We checked up on five major retailers on our “Behind the Numbers: Reimagining Retail” podcast to get a nuanced take on who took a hit in the short term and what our experts expect looking further out.
Amazonian giant: “We are seeing that the fears of inflation, and economic pressures in general, are really starting to hammer in on the consumer,” said our analyst Suzy Davidkhanian. “Even Amazon, where people go buy all kinds of things, is starting to feel that effect.”
Our analyst Blake Droesch predicts that headwinds across Amazon’s business, specifically within its voice assistant and Amazon Web Service endeavors, will drive efficiency in retail.
Walmart’s grocery smarts: “This is really a time where Walmart can show basically how resilient it can be based on how diverse and generally applicable [its] business model is to any consumer,” said Droesch.
The Home Depot improvement: Despite a tanking housing market, The Home Depot was able to pivot to home-improvement and do-it-yourself marketing to boost sales, according to Davidkhanian. The retailer also leveraged mobile, both in-store and online, and positioned itself for success with its pro program, which serves contractors directly.
Target missed the mark: Target had a weak third quarter, but Droesch is optimistic for the long term. “I’m really interested in what Target can do. I think there’s a lot of potential.”
Macy’s in the bag: Macy’s revenues fell, but not as much as investors feared, leading to a spike in stocks last week.
Final thoughts: The third quarter was challenging for pretty much everyone. But consumers made and will continue to make targeted purchases from retailers that can save them money. For Amazon and Walmart, value and deals will drive sales. At The Home Depot and Macy’s, loyalty and an understanding of their customers are helping revenues. And at Target, it’s all about the long game in ecommerce.
But these strategies don’t exist in a vacuum. Combining savings, loyalty, brand strength, and ecommerce planning will result in the strongest retailers as we enter 2023.
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.