With Halloween in the rearview, all eyes are locked on the holidays ahead.
Retailers are trying to win over customers — from special in-store experiences to early deals on holiday gifts.
Discounts, in particular, may go a long way for retailers amid a year marked by economic uncertainty and weak consumer sentiment. Consumers are seeking out both convenience and value “to pull off their holiday,” according to Katherine Black, a partner with Kearney where she leads food, drug and mass market retail.
“Retailers face a number of headwinds this holiday season. Tariffs, the government shutdown and almost daily news of large-scale layoffs are all putting pressure on the consumer,” Black said.
More than 30 states last month warned food assistance funds would become unavailable in November due to the government shutdown, which put even more pressure on consumers heading into the holiday season. On Monday, the Trump administration said it would tap into contingency funds to pay for some SNAP benefits.
For companies that are already struggling and need to land on consumers’ nice lists this year, getting retail fundamentals right is critical.
Providing fast shipping, easy returns, accurate in-stock statuses and clear pricing are “nonnegotiable,” Black said. While AI and other technology can be “exciting,” they don’t beat out reliability.
About 40% of consumers plan to split their holiday shopping between physical stores and online, according to a report from Experian in conjunction with ad platform GroundTruth. That means retailers must “deliver value and excellence in every channel,” said Michael Brown, a partner and Americas retail leader at Kearney.
“Once again, the consumer will be shopping across multiple channels. Single-channel promotions in mobile, browser, social or in-store shopping will miss hungry bargain shoppers,” Brown said.
Honing in on the “best customers” can also prove beneficial to retailers. “Your loyal customers will reward your efforts the fastest and are also the first to notice an improved offer,” Black said.
The holiday season is important for every retailer, but for some, performing well and connecting with customers during this period is crucial.
While not exhaustive, here are four companies that could use a win this holiday.
1. Saks Global
For much of this year, analysts have cautioned that Saks Global’s troubled relationship with vendors could interfere with the holiday season. Some believe a weak holiday quarter could mean bankruptcy in the new year.
In February, Saks Global CEO Marc Metrick sent a memo to vendors that acknowledged an 18-month backlog of unpaid vendor bills. Metrick also outlined a payment plan that involved delaying some past-due payments until the summer.
But relationships with vendors continued to break down. Several vendors in August reported payments had still not been made, and some stopped shipping to Saks customers.
Analysts warned for months of the potential consequences Saks Global could face heading into the holiday season. While the company secured $600 million from its bondholders, helping to support it heading into the all-important quarter, relationships with vendors remained strained.
Metrick acknowledged on the retailer’s latest earnings call that “inventory challenges” contributed to the company missing its own sales expectations in the second quarter. The conglomerate reported Q2 revenue fell over 13% year over year to $1.6 billion. Ending inventories were $1.9 billion compared to $2.1 billion in the year-ago period.
The challenges related to inventory have continued into the third quarter, Metrick said.
The conglomerate — which formed following the $2.7 billion acquisition of rival Neiman Marcus at the end of last year — has also faced significant leadership changes, losing a merchant, stores president and senior vice president of accelerated store growth in recent months.
2. Lululemon
Lululemon once ruled the athleisure space, but it’s been losing ground lately.
New entrants, like Vuori and Alo Yoga, have taken market share, while Lululemon’s own merchandise has struggled to hit the mark with customers.
CEO Calvin McDonald on its most recent earnings call said the retailer has become “too predictable within our casual offerings and missed opportunities to create new trends.” The company previously said it missed opportunities in the women’s category due to a limited color offering in leggings and certain sizes being out of stock. That has stunted its growth in the U.S.
Lululemon’s revenue grew 7% in the second quarter with comparable sales up 1%, thanks to its international business seeing 22% revenue growth and 15% comps growth. In North America, revenues grew 1%, while comps fell 4%.
The activewear space has faced declining demand more recently after seeing highs during the pandemic. But Lululemon seems to be having a particularly hard time, according to GlobalData research, which said the broader athleisure market was up 3.4%.
“Our data suggest that even relatively loyal Lululemon shoppers are broadening their repertoire, increasingly willing to try alternative brands,” GlobalData Managing Director Neil Saunders said in emailed comments following the retailer’s Q2 earnings report. “The blunt truth is that Lululemon is no longer the challenger; it is now the brand that other, younger labels look to hunt and take share from.”
To help turn its fortunes around, Lululemon has been working to overhaul its design and development processes, as well as accelerate its go-to-market timeframe.
3. Nike
After years of working to grow its DTC business — and alienating key wholesale partners along the way — Nike is working to strike the right balance with its channel distribution strategy.
In its most recent fiscal year, the athletics giant saw revenues fall double digits year over year, reaching $46.3 billion. But the brand is embarking on its turnaround as the broader retail industry faces macroeconomic pressures, including the effects of tariffs.
Nike said it’s anticipating a $1.5 billion impact from tariffs, up from previous estimates of $1 billion.
But the brand is seeing “tangible progress” under the leadership of Elliott Hill, who took the helm about a year ago.
The executive has ushered in new leadership, restructured its teams around key sports and worked to build stronger relationships with wholesale partners.
The retailer has also experienced a strong early response to its NikeSkims venture, which officially launched in September.
In its most recent quarter, Nike reported Q1 revenue rose 1% year over year, while running, North America and wholesale — all focus areas for the brand — also saw growth. But the retailer said its DTC business, which fell by double digits in the period, wouldn’t return to growth this year.
Nike’s turnaround, however, comes as rival Adidas eyes growth on the Oregon-based brand’s turf — the U.S. market.
4. Mattel
Mattel — a leader in the toy industry — could use a good holiday quarter.
The company last month reported third-quarter net sales fell about 6% year over year to $1.7 billion — missing expectations. At the same time, net income declined 25% to $278.4 million, while gross margin fell 310 basis points to 50%.
The sales decline in the third quarter “implies riskier dynamics heading into holiday season,” UBS analysts led by Arpine Kocharyan said at the time.
Executives, however, touted continued strength in consumer demand — even now.
But ever-evolving tariff policies have challenged Mattel. Retailers are shifting from direct importing to domestic shipping to help mitigate tariffs, so Mattel is now handling the importing and warehousing of goods. Retailers are also placing smaller, but more frequent, orders, presenting another hurdle for the toy company.
Mattel, however, said inventories are well-balanced, ending Q3 with $827 million in inventory, up $89 million from last year.
“Retailers are restocking to meet the expected consumer demand ahead of the holiday season,” CFO Paul Ruh said on its latest earnings call. “So all of this bodes well for a strong holiday season and also for a good ending of the year.”