With the arrival of the holiday season and the full weight of tariffs in effect, retailers big and small are having to make tough decisions in order to balance their bottom line with customer satisfaction. This comes at a time when retail is already seeing a mass exodus of CEOs, with over 40 leadership changes this year so far. This makes it an especially challenging market for reporters to stay in touch with. However, with constant changes come constant new story angles waiting to be explored.
On Dec. 10, the Society for Advancing Business Editing and Writing (SABEW) hosted a webinar to highlight key issues reporters are seeing in the retail industry and provide tips to journalists on how to find the nuance in each story.
The panel was moderated by CNBC senior retail reporter Courtney Reagan and featured three panelists from distinctively different publications: Jaclyn Peiser, retail reporter for The Washington Post, Amanda Mull, senior reporter for Bloomberg BusinessWeek, and Kaarin Moore, senior editor at Retail Dive.
Each panelist spoke from their years of experience reporting on the industry to give attendees a glimpse into what is actually happening right now and how people’s everyday lives affect their interactions with retailers. Additionally, they emphasized that many trends and indicators they are currently watching are not exclusive to the holiday season.
Adding context to data
A common theme throughout the session was the importance of adding context when reporting top-line numbers found in earnings reports, as those numbers rarely tell the whole story.
For example, Peiser reminded the group that there was a major election last year that certainly impacted the industry, and that year-over-year comparable data “could look favorable in the early part of November because people were kind of waiting to see what was happening with the election to then buy.”
Although retailers are reporting earnings numbers that are better than expected from the previous year, Mull noted that when you “drill down a little bit in that data, and it’s hard to tell exactly why that is happening.”
“We are having sort of a volume versus dollar amount situation,” said Mull, referring to the impact of high levels of inflation over the last year that has caused many consumers to change their buying habits. “Are retailers actually selling more in dollar value? Yes. In units, it seems like no.”
Agreeing with Mull, Peiser explained that even when earnings numbers are higher, that doesn’t necessarily mean that consumers are feeling better about the economy and spending more or buying more things. “Look through what the data is saying and then take a step back. What is the second day story here?,” said Peiser. “What can we extract from this, and what are the themes and trends?”
What retail says about the broader economy
All three panelists emphasized that the retail industry can help tell a broader economic story. For Moore, pulling apart the data helps her see indicators of how consumers may actually be feeling about their financial security.
She used the recent Black Friday shopping weekend as an example. Despite billions of dollars in sales over that weekend, the data show that “sales volume was down 1%” and “the most visited place over Thanksgiving-Cyber Monday weekend was grocery stores.” She explained that this may indicate that consumers are purchasing fewer items and predominantly spending on essentials.
Reporters can also get an idea of consumer finances by looking into how consumers are paying for their purchases. In particular, Moore noted that Buy Now, Pay Later use is “up almost 9%.”
“Years ago, I had an interview with the CEO of Afterpay, and the thing that they expressed was that they were surprised about how the consumer was using Buy Now, Pay Later, because they expected, ‘hey, they’re going to come in for big purchases, like, people are going to buy, like, I don’t know, surfboards with this.’ But what ended up happening is people ended up buying t-shirts with it.”
These trends aren’t exclusive to lower or middle-income consumers. According to Peiser, even higher-income consumers are holding off big ticket items and waiting until they can get the best deal. “They’re really looking for that discount, and that also puts pressure on retailers to really deliver, because they know that there’s competition there. So, Walmart, as we’ve seen for several quarters, is getting higher-income consumers into stores.”
Moore noted that this trend can be a market indicator in itself. She highlighted that dollar stores are also seeing an increase in higher-income customers searching for items that they may not want to pay full price for, such as holiday decorations and stocking stuffers. This paints a clearer picture of consumers focused on finding value, and that “they’re willing to trade down if it serves them more.”
Value vs. price
“Consumers are value-seeking, and that doesn’t necessarily mean price,” said Reagon. Using an example of a parent purchasing a more expensive batting glove for their child, Reagan explained that “if they believe that it helps their performance, they see value in that item, and then they are willing to spend.”
Nodding in agreement, Peiser added that although it may not be true for every customer, oftentimes, “we are willing to shell out money for something that we really want, or we really think could add to our life.” In this way, the reporters discussed how brands are seeking ways to add value to their products in a world where consumers have endless options to choose from.
For brands, Mull explained that “you have to figure out what else you offer to the consumer beyond just a physical product itself, a pair of jeans, a jacket, something like that. You have to find points of differentiation, because we’re no longer in an economy where people have a hard time finding a pair of jeans.” According to Mull, one way brands achieve this is by collaborating with artists, celebrities, or other brands that are salient to their desired customer in order to create moments of cultural relevance and connect with those consumers.
This method is especially important for brands at a time when “everybody is getting nickeled and dimed,” said Moore, including retailers themselves. Moore explained that the problem isn’t necessarily that retailers are drastically increasing their prices, but rather the rising cost of living – rent, utilities, groceries, etc. – is putting pressure on retailers to be more strategic about implementing price increases in order to maintain sales.
Peiser chimed in that some retailers have chosen to maintain low prices on goods that may be costing more due to tariffs, like bananas, while raising the prices on goods that they believe people are more willing to spend extra on, such as flowers. “So they’re being really creative on figuring out where they’re going to raise and lower prices,” said Peiser.
Mull added, “What we’ve seen so far is [retailers] sort of grasping around for any internal savings they can find” before raising prices on products. Mull continued that the pandemic exposed the inner workings of the retail industry that most people hadn’t paid attention to before. Since then, consumers are simply more primed to pick up on price-changing tactics they previously wouldn’t have noticed. She added that social media, in particular, magnifies those changes to a new level, and retailers have had to navigate this new dynamic with the customer, and some brands are handling it better than others.
Peiser elaborated that a couple of years ago, when inflation was really high, the CEO of E.L.F. Cosmetics posted on their social media accounts essentially saying, “We are gonna have to raise the price of 30% of our items by a dollar, and this is why.” Other small businesses had a similar approach with the suspension of the di minimis exemptions and proactively emailed shoppers to explain the price increase. This transparency approach seems to have a better reception with consumers, said Peiser. “I’m sure people aren’t as thrilled about it, but at least they like the honesty of it,” and that really ties into brand trust and brand value, which is hard to get back once it is gone.
Final advice to fellow reporters
Overall, the panelists emphasized that readers want to see more than regurgitated earnings numbers. Peiser stated that “our readers really want to see themselves reflected in our stories, they want to feel understood about what their interests are and their struggles.” To do this, she highlighted the importance of not solely relying on listening to retailers, but to get out and speak with real consumers and small businesses as well.
Mull echoed the sentiment by suggesting that any reporter who doesn’t already work for a trade publication to start reading them, because those publications will dive deeper into the day-to-day intricacies of the industry more so than your average news publication. She continued that while trade publications can be great, reporters should approach trade groups with a healthy dose of skepticism.
“Remember that trade groups are not objective sources of fact. They are there to lobby on behalf of an industry,” Mull warned, “they can sometimes provide useful information, but they are not the end-all, be-all source of fact about the industry.”
In conclusion, Moore stated that the best advice she could give to someone seeking to cover retail is to learn how to read financial documents – as that is where many stories start – and to never be afraid to ask for help from colleagues. “Ask the dumb question,” said Moore, “because that’s how the reporting out in the world gets sharper and sharper.”
