Retailers are facing a cautious holiday shopping season as economic uncertainties temper consumer spending, even after a U.S. Federal Reserve rate cut. Walmart is capitalizing on its low prices to attract a broader customer base, including higher-income shoppers. Its optimistic earnings outlook stands in stark contrast to Target, which has flagged weak demand for discretionary goods like home items and electronics. The National Retail Federation predicts overall holiday sales growth will slow to its lowest pace in six years, with fewer shopping days between Black Friday and Christmas adding to the challenges.
Mobile commerce is emerging as a key battleground, with smartphones expected to account for 53% of online holiday spending, totaling $128.1 billion. Retailers are leaning into loyalty programs and personalized promotions to lure shoppers early, a trend accelerated by Gen-Z consumers' preference for mobile shopping. Social media influencers and AI-driven marketing strategies are further shaping spending habits, helping retailers like Walmart and Target drive digital sales and same-day delivery services.
Adding to the complexity, an October port strike disrupted inventory flow at 36 U.S. ports, including major hubs in New York and Houston. While most retailers planned ahead to avoid delays, sluggish demand for non-essentials risks leaving them with excess inventory heading into 2025. Analysts expect an intense promotional season as stores vie for customer attention in a shortened holiday calendar, amplifying the competition between retail giants.
