Discover more from Random Walk
An early look at holiday shoppers
Daily Data: What does the Almighty Consumer's shopping list have to say?
American Eagle and Abercrombie & Fitch are so back. It’s high school all over again.
Everything reads better in your browser or in the app. The footnotes especially, and Random Walk is really leaning into the footnotes. Plus, if you have the app, you can set delivery to “app only” and then my daily barrage will feel less like a barrage. Unfortunately, substack does not yet have a “Weekly Digest” option, but I’m hectoring them aplenty.
If this email was forwarded to you, please click the shiny blue button:
Holiday Shoppers are holding back (slightly)
Various outlets reported some version of “US Shoppers Take a Holiday Breather.” The implication is that the Almighty Consumer—the bedrock of the economy—is slowing its roll a bit.
Not a disaster by any stretch, and whatever your priors, be they bearish or bullish, they can be confirmed.
No more luxury
Not that it’s surprising, but based on the categories of stuff that people bought (or didn’t buy), it’s pretty clear that consumers are tightening up.
All the expensive discretionary stuff, and Airfare interestingly enough, were out:
Off-price and marketplace shopping were in. 2
That’s not an Experiences > Goods shift. That seems pretty clearly to be “spend less money” shift.
Gimme the cheap stuff instead
Merchant choices also suggest “trade downs” or some preference for cheaper alternatives, but there are some exceptions too, like the always amazing Lululemon:
Shein(!) and TJ Maxx are definitely are “fast fashion” and “off price” respectively, which are just two different ways of saying “cheap.”
The even cheaper Temu grew 1,800% YoY—off a low base, but still not a typo—and had to be excluded from the chart.3
Foot traffic also suggests a taste for discounts, as off-price merchants (especially TJ Maxx), were busier than last year:
That’s per-store visits, so it’s not just a function of more locations.
Put it together, and people are doing discount shopping, avoiding luxury items and flights, and if you peak closely enough, maybe you see a little Lipstick Effect too (or it’s just that Ulta is a very well-run company).
There’s actually some interesting stuff going on in the broader world of retail.
Between the rise of Temu and Shein (and TikTok shopping), but also Shopify enabling “Buy With Prime” (so Shopify merchants can sell more easily on Amazon), and Amazon sharing first party data with Facebook and Instagram (so Meta users can buy Amazon stuff in Meta products when they click the Amazon ad), there are some high stakes frenemy alliances underway.
It sure is weird how these monopolies just keep competing and innovating and fighting for customers.
It’s very unmonopoly like. Someone should tell them.
Random Walk is an idea company dedicated to the discovery of idea alpha. Find differentiated data, perspectives and people, and keep your information mix lively. A foolish consistency is the hobgoblin of small minds. Fight the Great Idea Stagnation. Join Random Walk. Follow me on twitter. Follow me on substack:
The card data also shows a bit more of a dropoff than the Census Bureau:
It’s hard to say who is “right,” but for what it’s worth, Target’s comparable sales were down almost 5%, but either way everyone agrees that there’s a little less holiday shopping this year.
Got to love pet supplies as forever pushing onwards and upwards. It’s also a thing that people continue to buy more and more of online (while most other categories have receded a bit from the pandemania highs).
People bought a lot of pets during the pandemic, and maybe they’re super lonely too.
The success of Shein and Temu demonstrate again that Decoupling from China is a little more complicated than we thought. Also, the ability of Chinese consumer apps to gain marketshare never ceases to amaze, and simply doesn’t fit with the generic model of a repressive or conformist society.