Target, Kohl's, & Best Buy Struggle—Is Your Brand at Risk?

Gone are the days when novelty socks and quirky gadgets could carry a retailer’s bottom line. While impulse buying still exists, it’s on the decline. Today’s shoppers seek value, practicality, and experiences more intentionally. For businesses, this shift presents both challenges and opportunities.

Retail has long thrived on the allure of impulsive purchases. But with tighter budgets and more cautious spending, shoppers are rethinking how they allocate their dollars. According to the National Retail Federation, holiday spending is expected to grow by 2.5% to 3.5% this year. Shoppers aren’t necessarily spending more—they’re just spending differently.

Neil Saunders of GlobalData Retail sums it up: “Rather than buying five things, they might be buying three things. And under that environment, it’s easy to say, ‘Well, where do I not go to buy things?’”

The result? Retailers who focus only on selling “wants” instead of balancing “wants” with “needs” are struggling to keep up. Target, Kohl’s, and Best Buy have reported underwhelming results, while Walmart, Abercrombie & Fitch, and Dick’s Sporting Goods are thriving. The common thread among the winners? A clear understanding of the evolving priorities of today’s shoppers.

Today’s consumers are looking for value—not just in price but in their purchases' overall experience and utility. Marshal Cohen of Circana calls it “the best bang for the buck.” Customers favor gifts that offer long-term benefits or memorable experiences over disposable trinkets.

This is a critical insight for businesses: deep discounts alone won’t cut it anymore. Instead, brands must focus on offering products and services that align with their customers' desires.

How retailers can adapt

This isn’t just a passing trend; it’s a paradigm shift. For retailers, the challenge lies in meeting customers where they are—financially and emotionally—this holiday season. Here’s how businesses can stay ahead of the curve:

• Curate thoughtful inventory: Stocking shelves with items that resonate with today’s buyers is more important than ever. Think practical gifts, experience-driven offerings, and products that solve real problems. If it doesn’t provide value, it’s likely to sit on the clearance rack
• Tell the story behind the product: Shoppers want more than a transaction—they want to feel good about their purchase. Highlight how your product aligns with consumer values: sustainability, local production, or innovation. A compelling narrative can differentiate your brand in a crowded market
• Optimize the omnichannel experience: Intentional shoppers do their homework before purchasing. A seamless blend of online and in-store experiences ensures customers can research, compare, and buy without frustration. Clear messaging, accessible inventory, and personalized recommendations can make all the difference
• Lean into experiences: Partner with service providers or bundle products with experiential value, like spa kits with access to virtual wellness classes. The more you connect your products to meaningful moments, the better you capture customer interest

This new era of intentional spending is not a threat—it’s an opportunity. Retailers who embrace this moment can build deeper customer loyalty by showing that they understand and respect their audience’s priorities. Strategies like aligning marketing with customer values, delivering seamless omnichannel experiences, and fine-tuning product assortments for relevance are key.

Holiday seasons have always been make-or-break for retailers, but the stakes feel particularly high this year. For businesses, the winners won’t just push sales—they’ll align with their customers' values and adapt to their evolving needs.

So, as your company plans its next move, ask yourself: Are we giving shoppers what they want—or what we think they want? The answer could define your brand’s place in the holiday retail race.