Fireworks, BBQ and patriotism are in the air.
At this time about 240 years ago, the United States officially signed the Declaration of Independence, stating the 13 colonies at war with Britain had separated themselves to form their own country.
Stemming from the creation of this brand new country that we today call the United States of America, we’ve developed our own identity. From freedom of religion to freedom of speech, the right to peaceably assemble and starting myriad new industries, the U.S. has worked hard to push onward in its evolution.
While the tradition of celebrating our nation’s birthday has certainly seen some changes over the last few hundred years, at its core it’s still a time for group gatherings to show their love for the country.
One of the ways in which U.S. citizens tend to show that appreciation for country is by investing their dollars back to the economy via shopping transactions. This national holiday has thus turned into a time where the retail industry provides discounts on products and services to help drive up business profits.
Given this transition, retail technology company EDITED shared details from its research report around what the retail industry can expect to see during the Fourth of July time of year.
Following Black Friday, the Fourth of July is considered to be one of the biggest times for sales discounts, according to EDITED’s research. At a rate of one-third of the amount of discounts as Black Friday, our nation’s birthday actually is trending upward, with a 15.5 percent increase in discounts so far, compared with last year.
Retailers are actually putting out a larger number of discounts, with 77 percent of items’ prices coming down more than 50 percent, or about 475 items per merchant. EDITED’s senior fashion and retail analyst, Katie Smith, commented on this and shared strategies for retailers during the holiday.
“Black Friday is the front-runner for retail discounts, but July marks summer sales and sets the tone for a retailer’s sales strategy for the rest of the year,” Smith said. “While discounting products can help to fuel consumer spending, it can also dilute the value of a product and mean customers can expect to never pay full price. Rather than an over-reliance on slashing prices, retailers should consider discounting in the context of long-term performance.”
It seems that these discounts may not be having too much of an effect on diluting retailers’ overall profits. This year, the National Retail Federation’s (NRF) research showed that Americans are going to spend approximately $7.1 billion to celebrate the fourth.
Fireworks, hot dogs and beer are not the only items on people’s shopping lists.
A majority will be spending money on cookout-related items (65.5 percent), 13.3 percent will be putting their money toward traveling, 11.6 percent will not celebrate at all and a mysterious 8.3 percent will be buying miscellaneous items.
Interestingly, 72.5 percent of shoppers in America will not be spending their money on patriotic-related items.
What does this research mean for retailers?
It may mean that merchants should focus a little less on American flag-covered items and more so on necessities or possibly luxury items. Those looking to get their profits back into the black are probably going to be looking at moving as much seasonal merchandise out of their inventories and updating with fresher items.
Alternatively, this summer retailers may begin the process of experimenting with the merging of digital integrations into physical store spaces. As we reported last week, more than 45 percent of retailers are looking to incorporate new technologies like artificial intelligence into the consumer experience within the next few years.
Now that we’re at the midpoint of the year, it may also be time for the retail industry as a whole to reevaluate its future direction. With long-time big box retailers like JC Penney and Macy’s closing locations, Staples getting acquired and Amazon buying Whole Foods, it seems like consolidation and reinvention of the retail persona are in order.