Department Stores in U.S. Not Buying As Much for Holidays

During the holiday season, retailers are ordering less for shoppers in the U.S., with the decline of foot traffic in department stores across the country. Retailers would normally be placing large new orders but many people who working with the retailers say the orders are far smaller this year.

A new strategy is in place to keep the cost of inventories down and to avoid what has taken place the past few holiday seasons, when large inventories of unsold products led to huge discounts that gobbled up profits.

However, at the same time, the retailer is risking losing sales due to supplies being depleted during a time when most are struggling to keep pace with the likes of Amazon.com and a continuing shift towards shopping online.

J.C. Penney, Kohl’s, Nordstrom, Dillard’s, Lord & Taylor and Macy’s are amongst the retailers that are buying less with less lead time for the 2017 holiday season and are relying on forecasting more than during the past, according to some sources that have been in touch with the retailers.

Officials at Lord & Taylor have said the retailer was working on making a purchase of carefully selected products for the holiday shopping season, but would not say what the products were. Others such as Nordstrom, J.C. Penney, Kohl’s and Macy’s declined to make a comment.

Keeping levels of inventory low help to manage costs and might also place some sense of urgency in consumers to spend their money now and not later for hopes of finding a better deal, as they risk not having the items since fewer are being purchased.

The strategy of high stakes is similar to that of Zara and H&M the fast fashion retailers who consistently maintain low inventories of clothes that are trendy and attempt to win clients with less expensive prices.

The choice could be limited in some of the sections within department stores said one marketing executives with Macy’s who asked not to be identified.

However, limiting choice is better in many ways that having an overcrowded store, which makes it more difficult to shop.

Retailers traditionally lock in the majority of their purchases from nine months to one year in advance. However, in 2017, retailers began places most of their orders for the holidays only three to four months prior to the season starting and have refreshed items that are fast selling within six to eight weeks, said consultants and vendors.

Leave a Reply