What retailers can do to get customers to spend more when they’re concerned about finances
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:
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:
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.