Macy’s is tapping Kylie Jenner’s Kylie Cosmetics as part of a potentially long-running deal aimed at bringing the buzzy cosmetics brand into even more brick-and-mortar stores. In an announcement on Tuesday, the New York-headquartered retailer revealed that it will roll out “a limited-edition Holiday Collection” with Kylie Cosmetics beginning on October 1, followed by “additional core products launching this winter and the full collection coming to stores and online in early Spring 2023.” Reflecting on the tie-up with the “beauty powerhouse” that is Kylie Cosmetics, Macy’s VP of Beauty Merchandising Nicolette Bosco said it comes as Macy’s “expand[s] our ever-growing portfolio of beauty lines” in furtherance of an aim to “connect our customers to brands that celebrate their own personal style.”
The news of the parties’ venture – which will help Macy’s to get consumers into its stores and on to its e-commerce site – comes as retailers are feeling notable pressure ahead of the important 2022 holiday season, during which time U.S. retail sales (excluding automotive) are expected to increase 7.1 percent year-over-year, according to the Mastercard SpendingPulse annual holiday forecast. Despite such projected increases, this year, companies will be forced to grapple with the impact of inflation, which is slated to muddy the waters, as consumers “search for deals [and/or] make trade-offs that allow for extra room in their gift-giving budgets,” Michelle Meyer, U.S. Chief Economist at the Mastercard Economics Institute, says.
The Macy’s, Kylie deal puts into practice many of the key themes that are expected to dominate retailers’ practices during the 2022 holiday season, from extended holiday shopping timelines to the rise of new collaborations aimed at getting consumers to shop in-store. “With holiday shopping slated to begin early again this year,” Mastercard expects “some of the season’s retail growth to be pulled forward in October as consumers hunt for early deals.” Key promotional days, such as Black Friday weekend are also likely to make “a strong return along with Christmas Eve, which falls on a Saturday, slated to be among the biggest days for retailers and last-minute shoppers,” the company states.
At the same time, brands and retailers, alike, are expected to roll out in-store experiences to draw shoppers into stores. “From the return of holiday doorbusters to new brick-and-mortar collaborations,” companies are angling to drive shopping in-store, where consumers tend to spend larger sums per transaction and where the rate of returns is significantly low. Against this background, Mastercard’s forecast sees in-store retail sales rising by 7.9 percent year-over-year and up 10.4 percent from pre-pandemic 2019 levels. “While e-commerce has seen marked growth in recent years,” its data shows that “in-store spending made up more than 4/5 of retail sales from January through August 2022.”
Looking beyond trends that are not as easily discernible in the Kylie and Macy’s partnership, Mastercard estimates that apparel sales, for instance, are likely to increase this holiday season, with consumers adding “revamped wardrobes to their wish lists as social events and platforms” have resumed post-pandemic. Apparel sales are estimated to rise by 4.6 percent year-over-year and 25.3 percent compared to 25.3 percent from 2019. Meanwhile, luxury goods are expected to be “hot holiday gift sectors,” with sales increasing 4.4 percent year-over-year and 29.6 percent from 2019.
And still yet, bargain hunting is expected to be in full force this holiday season – and leading up to the season, as retailers plan to implement “steep markdowns to clear shelves ahead of the holiday season,” according to the Financial Times. “I hesitate to call it a bloodbath,” Urban Outfitters CEO Richard Hayne asserted during the group’s Q2 earnings call last month. Nonetheless, “It’s going to be ugly in terms of the amount of discounting and markdowns,” he said, noting, “We think there’s too much inventory across the board.”
“From deals and discounts to price monitoring and price matching, consumers are looking to stretch their dollars and get the most bang for their buck,” Mastercard contends. “E-commerce is anticipated to increase despite significant growth last year, up 4.2 percent year-over-year and 69.2 percent from 2019,” in a nod to consumers’ concern over price. After all, Mastercard states that “the channel remains a convenient way for consumers to check prices in real time.”
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