woman jacket shopping

Apparel Brands Look to Lean on Walmart and Target

Clothing Sales Follow the Foot Traffic

Despite health concerns and constrained budgets, Americans are still shopping for clothes. However, data shows Americans have been skipping the mall and department stores to head to Target (TGT), Walmart (WMT), and even Tractor Supply (TSCO).

Location data shows that foot traffic fell by 40 to 60% at Macy’s (M) stores this summer compared to the same time last year. Meanwhile, stores like Target and Walmart that sell clothing alongside household essentials and groceries were able to retain in-person customers. Target lost less than 10% of its foot traffic in June, July, and August. In fact, Target actually saw a jump in shoppers last month compared to September 2019.

Apparel sales reflect these foot traffic numbers. While sales at Macy’s fell 36% and Nordstrom’s (JWN) fell by 52% last quarter compared to a year earlier, Target sold 11.7% more clothes and accessories than it had the year before. Walmart’s warehouse store Sam’s Club and Tractor Supply Co. also saw a double-digit boost in apparel sales last quarter.

Some Companies Fear Brand Dilution

Many clothing brands have taken notice of the shopping shift and are responding with more offerings in big box stores. Levi Strauss (LEVI), for example, is taking its higher-priced jeans to 360 more Target stores by next fall. Levi’s more affordable Denizen brand is already available at Target. Just last year, the brand experimented with selling more upscale denim in Target stores under the Levi’s brand and was pleased with the results.

Some apparel brands aren’t quite as keen to make their clothes available in big box stores. Citigroup (C) analyst Paul Lejuez said this is because they’re afraid of spreading their brand identity too thin. Levi’s experience, however, proves more shoppers are looking for clothes, including slightly more upscale items, alongside their groceries. In additional evidence that big box stores could aid the apparel industry, Steve Madden (SHOO) executives said on a recent earnings call they will rely on Walmart and Target shoppers to be “growth customers” in the coming year.

Behind the Big Box Boom

Even before COVID-19, foot traffic was falling at department stores like Macy’s and Nordstrom due to the rise of ecommerce. Online shopping has picked up even more during the pandemic due to lockdowns, quarantines, and lingering health concerns.

That said, there are still shoppers who are heading to brick-and-mortar locations. The ones attracting the foot traffic offer essential items like sanitization products and groceries. Instead of separating their shopping, risk-averse consumers are buying clothing and groceries in the same store. This change in habits may endure post-pandemic—especially if brands decide to broaden their offerings in stores like Target and Walmart.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender