As Home Depot, Target, and Walmart reported their quarterly sales and shared full-year outlooks, the companies offered up the latest clues about the health of the American consumer. They previewed what could be ahead for the economy.
Retailers report that shoppers spent less, especially on discretionary merchandise. Stubbornly high prices, especially for food, are a storm cloud that hangs over many families who shop at Walmart and looms over the retail industry.
General merchandise costs in the U.S. are lower than a year ago but still higher than two years ago. In many other categories, however, Home Depot CEO Ted Decker said earnings call that inflation still drives a higher average ticket for customers. He added some homeowners had already tackled big projects and bought some high-priced home items during the early years of the Covid-19 pandemic, leaving less for them to do or to buy now.
At Target, sales declined in some discretionary categories as much as low double-digits as customers bought less clothing and home decor, Chief Growth Officer Christina Hennington said on an investor call.
Sam’s Club has noticed slower sales of patio sets, perhaps because of the later-to-hit spring weather, its CEO Kath McLay said on an investor call. The discounter expects a sales boost in the back half of the year due to the big shopping season.
Shoppers are shifting to shop more in time in these categories, as they wait until the last moments before key events to invest in new decor or wardrobe refreshes.
Still there are things retailers can do to get consumers to spend more money.
There are many things that retailers can do to get consumers to spend more money. Here are a few of the most effective strategies:
- Could you create a positive shopping experience? This means ensuring the store is clean, well-organized, and staffed by friendly and helpful employees. It also means providing a variety of amenities, such as free Wi-Fi, comfortable seating, and children’s play areas.
- Offer attractive discounts and promotions. This is a tried-and-true way to get people to spend more money. Retailers can offer deals on individual items, bundles, or entire categories of products. They can also offer free shipping, gift cards, and other incentives.
- Use social media to promote your products. Social media is a powerful tool that can be used to reach a large audience and generate excitement about your products. Share photos and videos of your products, run contests and giveaways, and engage with your followers regularly.
- Personalize your marketing efforts. The more you know about your customers, the better you can target your marketing efforts. Use customer data to create personalized email campaigns, product recommendations, and marketing messages.
- Make it easy for customers to buy. The easier it is for customers to buy from you, the more likely they are to do so. Make sure your checkout process is simple and efficient, and offer a variety of payment options.
By following these strategies, retailers can increase sales and boost profits.
Here are some additional tips that retailers can use to get consumers to spend more money:
- Create a sense of urgency. This can be done by offering limited-time discounts or promotions or by creating a sense of scarcity around certain products.
- Make it easy for customers to impulse buy. This can be done by placing impulse items near the checkout counter or by offering free samples or trials.
- Upsell and cross-sell. When a customer makes a purchase, offer them additional products or services they may be interested in.
- Could you get customers to sign up for your loyalty program? Loyalty programs can help you to build relationships with customers and encourage them to spend more money with you.
- Provide excellent customer service. This will help to ensure that customers have a positive experience and are more likely to return to your store.
My experience is that the most challenging part of implementing these suggestions is hiring people who care about the customers they serve. Right now, retail customer service and sale help can make or break a retailer’s brand.