The situation is already quite difficult. Total retail sales fell 0.1% from September to October, the first month-on-month decline since March.
“This feels like an ominous sign,” said senior analyst Ted Rothman. Bankrate.com.
Retailers may have only themselves to blame for what could be a mediocre or terrible holiday season.
Here are three things they failed at this year.
discount fatigue
You may not believe it, but that kind of thing does happen. In the old days, consumers could expect sales on Black Friday and then in the last few days until Christmas.
But retailers are now offering “Black Friday” deals to consumers as early as September. To make matters worse, Amazon launched its second Prime Day of the year in early October, forcing other retailers to run their holiday promotions earlier than expected.
Non-stop promotion negates the meaning of promotion. The initial idea was simple. He offered consumers short-term deals on one item and hoped that once they were in the mood to shop, they would buy other items at higher prices.
Instead, with relentless holiday discounts, retailers are simply conditioning consumers to never buy anything at full price. While this is great for consumers, it takes a toll on retailers’ profit margins.
“This is a dangerous place,” said Eric Girouard, chief executive of Brandt Workwear, an online men’s clothing startup in North Reading. “Always he’s 50% off, it’s hard to make money.”
And any promotions do little to build long-term loyalty, as consumers simply wait for the lowest possible price.
“This is a race to the bottom,” said Carol Spiekerman, president of Spiekerman Retail Consulting.
![Products behind plexiglass at a Target store in Manhattan's Harlem neighborhood.](https://bostonglobe-prod.cdn.arcpublishing.com/resizer/nEdtplPYUNCw6vNGDVje1pnvv0g=/960x0/cloudfront-us-east-1.images.arcpublishing.com/bostonglobe/5T7KUDA7QG74PDREBP6JJ2IEBQ.jpg)
A crime-prone store?
Judging by public statements from some retailers this year, the entire industry is under siege from thieves and criminals, threatening the safety of customers and employees alike.
Target is one of the most vocal companies. In May, CEO Brian Cornell said inventory shrinkage (a retail standard for all the items people steal from stores) will cost Target $1.1 billion in profits between 2022 and the end of this year. It was revealed that it would be done.
It’s not just shoplifting that plagues Target stores, Cornell said, but violent crime is also rampant.
In fact, Target, Walgreens, and Walmart have all closed stores this year in major cities such as San Francisco and Chicago. CVS Health, based in Woonsocket, R.I., also had to store regular products like shampoo and toothpaste in locked cases.
Stern warnings about crime and danger mean nothing at all The image retailers want to project this season is of cheerful shoppers flocking to festive stores with bright decorations and Christmas spirit.
Crime costs retailers billions of dollars each year. The question is whether they have exaggerated the issue to the point that it scares customers away from visiting stores during the most important time of the year.
Shoplifting incidents in the United States increased by 13.4% last year compared to 2021, according to Coresight Research’s calculations of recently released government crime statistics. However, the company said that number remains below pre-pandemic levels.
“Yes, theft is a problem,” added DeAnn Campbell, retail consultant with AAG Consulting. “But it’s not as dire as many people portray it to be.”
It’s also worth noting that Target has struggled to increase sales this year. Companies that are doing well, such as TJX Companies and Dick’s Sporting Goods, say nothing about theft in their financial statements.
Framingham-based TJX, which operates the TJ Maxx and Marshalls chains, is trying to polarize the industry with its messaging.
“We believe we have taken the appropriate steps to ensure our customers have an enjoyable and safe shopping experience this holiday season,” a TJX spokesperson said in a statement. “We have many security measures in place and have trained our employees on how to respond in the event of various situations.”
Earlier this month, Target Cornell University told CNBC The retailer claimed it had made “real progress” in curbing shoplifting.
Just in time for the holiday shopping season.
![Inside the Best Buy store at Watertown Mall.](https://bostonglobe-prod.cdn.arcpublishing.com/resizer/wemYZAdA21czF635VGsQioGIRso=/960x0/cloudfront-us-east-1.images.arcpublishing.com/bostonglobe/ICEUV5MIDQQ6E3SSR72ATKIEQA.jpg)
too many things
The pandemic has significantly disrupted retailers’ supply chains.However, 2023 will be the first time Since COVID-19 hit it hard. Jeff Bornino, a former supply chain executive at Kroger, said the company’s inventory is relatively stable.
“Retailers now have a much better idea of true demand,” said Bornino, president of North America for consulting firm TMX Transform. “Consumers will be able to see what products are really interesting.”
But Bornino said retailers still have a big problem: too many products.
Retail is an industry that is especially susceptible to FOMO (fear of missing out). Businesses are concerned about losing sales to competitors. As a result, they carry an excessive amount and variety of products, many of which don’t sell, Bornino said.
“You can’t be everything to everyone,” he said. “Too many products can overwhelm customers. You end up with products that connect with consumers and products that are okay competing for shelf space.”
In fact, Bornino estimates that, on average, retailers need to reduce inventory by 15 to 20 percent. If you don’t, you’ll have to keep cutting prices to remove unnecessary items from your stores.
For retailers, “we don’t want to face reality,” Bornino said.
Thomas Lee can be reached at thomas.lee@globe.com.