What: Predictions for the coming holiday season leave retailers cautiously preparing for uncertain loss.

Why it is important: Uncertainty around inflation, geopolitics and labour market strain is making retailers especially cautious in their holiday season preparations.

Agility will be a key skill for retailers navigating unpredictable losses in the coming months. Interviews with retailers, vendors, consultants and industry analysts have indicated an extended season with increased promotions and price breaks starting even earlier than in 2021. Second quarter spending by American customers is decelerating as many took advantage of Amazon Prime Day and back-to-school sales to get ahead on holiday shopping.

Eveningwear, dresses, party outfits and related categories for jewellery, footwear and beauty are expected to see good sell-through while casual apparel, loungewear, electronics and home categories are predicted to drop. In addition, 83% of shoppers will seek out sustainable brands and products this holiday. Retailers will test NFT drops, and 46% of shoppers said they would consider purchasing NFTs.

Being able to respond to the replenishment of best-sellers and the ability to manage the quantity of merchandise that’s not selling, will determine which retailers succeed this holiday season. Department stores and nimble off-price retailers will be best positioned for stable performance during this unpredictable season.

Holiday promotions come early this year