Economy
23 January
This Week in Commerce: NRF Big Show review; Colgate, J&J earnings
Here's a look at the week ahead for Jan. 23-27.

Inside the NRF Big Show. (Photo by The Current)
Here's a look at the week ahead for Jan. 23-27.
Inside the NRF Big Show. (Photo by The Current)
Welcome to a new week. We’ve got a quick look back at the NRF Big Show to kick things off. Then, this week brings plenty of opportunities to gain insight into the state of the consumer. Colgate Palmolive, Johnson & Johnson, Kimberly-Clark and Levi Strauss will report earnings. Meanwhile, new economic data will offer a look at GDP and inflation.
Industry events are taking a breather this week after the NRF Big Show and Winter Fancy Foods Show kicked off the tradeshow year with high energy. With this week providing a chance to reflect and catch up following all of the activity, we’ll take a moment to share three takeaways from the NRF Big Show:
What does omnichannel mean now? The pandemic brought the spike in ecommerce, and last year featured the return to stores. Technology that connects the two is still called omnichannel, but a lot has changed over the last few years. Think: Googling "In stock near me," Buy Online, Pickup in Store. Building technology for in-person shopping that has digital touchpoints feels more important. Should we still call it omnichannel?
Profitability over growth. With a tougher economic environment expected this year, there's more priority on building loyalty with existing customers, and tightening up operations. We've had three years of swings and adjustment to huge changes. This year, there's an opportunity to pick which of the new approaches stick, and fine-tune to make them work for the long haul.
Composable commerce is everywhere. Retailers used to build custom ecommerce systems. Now, more technology is being built that allows them to choose the best pieces for their needs. Composable commerce is growing not only for customer-facing functions in the shopping experience, but also on the fulfillment and supply chain side. Leaders believe this technology must be built to allow for continuing change as new advances are developed.
The Current will continue to roll out interviews and analysis from the Big Show for the rest of January. Subscribe to The Daily Current newsletter to get the latest in your inbox.
Gross Domestic Product: The U.S. Bureau of Economic Analysis releases the Q4 2022 growth rate of GDP, which is the top measure of economic activity. This includes consumer spending, and any growth or decline is a primary indicator of whether demand for goods is remaining strong. In Q3, GDP grew 3.2%. 8:30 a.m., Jan. 26
Durable Goods Orders: The U.S. Commerce Department releases data for December on manufacturer orders and shipments of goods that are meant to last three years or more. This is an indicator of demand for larger-ticket purchases. 8:30 a.m., Jan. 26
Personal Consumption Expenditures: The U.S. Bureau of Economic Analysis releases data on consumer spending, savings and inflation for December 2022. This is the measure of inflation watched by the Federal Reserve and many economists.
Consumer Sentiment: The University of Michigan releases final data on consumer buying plans and economic expectations in January. In the initial reading, sentiment rose to its highest level since April as more people see inflation beginning to fall.
Tuesday, Jan. 24: 3M, Microsoft, Johnson & Johnson
Wednesday, Jan. 25: Kimberly-Clark,Levi Strauss & Co.
Thurs., Jan 26:McCormick, Visa, Mastercard, Tractor Supply
Friday, Jan. 27: Colgate Palmolive
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.