“Newness” is enticing inflation-weary consumers to spend
The word of the day — in the corporate world, at least — is “newness.” On Target’s earnings call Wednesday morning, it was used by executives around a dozen times. Target said newness was a factor in bumping up clothing sales last quarter and that it’s leaning into offering everything from new stuffed animals to new varieties of doughnut holes. Sales were up 2% compared to the same quarter a year earlier.
At a time when shoppers are watching every dollar, why are they willing to spend on things that are new?
Shopping can be a chore, but the possibility of finding something new can make it more like a treasure hunt. “People are like, ‘Ooh, this is exciting,'” said Jennifer Bartashus, an analyst with Bloomberg Intelligence.
She said newness has become a focus for Target, which is trying to give price-weary shoppers more reasons to buy.
“Consumers have a kind of a craving for something, whether it’s to reward themselves or enhance their lives in some way,” she said.
So, last year’s vacation in a new country has turned into trying a new kind of shampoo this year.
Bartashus added that retailers have become better at pushing these new products at us online. “You get better results for what you’re searching for, and you get better recommendations for things that you might also be interested in,” she said.
Newness can give consumers who might want a new shirt, but don’t need one, a way to feel less guilty about buying it, said Jennie Liu with the Center for Customer Insights at Yale University.
“‘I don’t have this color, or I don’t have this style or this latest trend,'” she said.
People also like variations on a familiar theme — more than 80% of consumers collect things at some point in their lives, according to Katie Thomas, who leads the Kearney Consumer Institute.
So, when Target rolls out a new Lego or type of candle, they’re gonna get it before the store sells out.
“What they’re doing is cycling things on and off the shelf. It’s not just adding to it. And so that taps into this idea of, like, ‘I’m gonna find something that hasn’t been here before and won’t always be here,'” she said.
Something that’s here at least for the short term is the use of the word “newness” on earnings calls.
Bucknell University accounting professor Kate Suslava said it’s used by financial services companies as well as retailers. She said it’s a quick way to get across a positive idea.
“The word ‘newness’ kind of makes you as an investor think, ‘They are introducing something new. They’re not, like, relying on old products.'”
Suslava said these kinds of terms can be catchy — executives listen to other executives, then pick up on what they say.