That Style, Again? How Shopping Got So Boring

The maker of Tonka trucks and Lite-Brite normally introduces four new toys a year. Last year, Basic Fun Inc. introduced one.

Manufacturers and retailers of everything from computers to dresses hit pause in the past few years when it came to innovation, the result of pandemic-related upheavals in the design, manufacture and distribution of goods, industry executives said. Shifting consumer demand and the expectation of an economic slowdown also played a role, the executives said.

New merchandise gives shoppers a reason to buy. Without it, sales tend to suffer. Retailers including Best Buy Co. and Gap Inc. said a dearth of new products, styles and colours contributed to lacklustre sales during the recent holiday season.

Now, the race is on to ramp up newness, the executives said. But the work that goes into creating new products often takes months, if not years. And some companies are reluctant to invest in the necessary research and development while economic uncertainty looms.

“The last thing you want to do is spend the money to create and market a new product and have it get stuck in the socio-economic crossfire of Covid, supply-chain disruptions and inflation,” said Basic Fun Chief Executive Jay Foreman. “All these things coming together at the same time means that you have to play it safe.”

Mr. Foreman said Basic Fun is delaying plans to relaunch its Littlest Pet Shop collectible figures until spring 2024 from fall of this year. “We anticipate the supply chain getting back to normal by the middle of this year,” he said. “But we’re still concerned about inflation and a slowdown in consumer spending.”

Gap Chairman and interim CEO Bob Martin said in an interview that a pile-up of excess inventory hindered the company’s ability to innovate.

“You stop leveraging creative strengths, you play it safe, and miss the bigger bets to get back on trend,” he said. Now that the company has worked through its excess inventory, he added, it has more room to devote to spring trends like eyelet and crochet tops at Gap, new suiting styles at Banana Republic, and Old Navy dresses with pockets.

There were 13% fewer new general merchandise items in 2022 compared with 2020, according to market-research firm Circana. The biggest declines were in beauty, footwear, technology, small appliances and toy categories.

Marshal Cohen, Circana’s chief industry adviser, said the decline is unprecedented and the result of several converging factors.

The Covid-19 pandemic radically altered consumption patterns, which forced manufacturers and retailers to pivot quickly to keep up with shifting demand. Supply-chain disruptions created first a scarcity of goods, and then a glut. With excess merchandise clogging shelves, retailers were unable to bring in fresh goods. Remote work made collaboration to dream up new ideas more difficult.

“Something as simple as a new flavour, colour or style can create demand,” Mr. Cohen said. “With a decline in newness, we are boring consumers to death.”

When demand for computers, TVs and other electronic gadgets surged, manufacturers focused on producing as much as they could of existing products to address shortages, Jason Bonfig, Best Buy’s chief merchandising officer, said in an interview.

Mr. Bonfig said he is starting to see an improvement in the flow of new products hitting stores, including TVs with larger screens and computers with longer battery life. “Vendors want to get back to growth,” he said. “They know new models are what brings people to our stores.”

Some retailers have acknowledged that the problem rests as much with them as with their suppliers.

“We didn’t have as many choices in women’s tops as we did in the past,” Ed Thomas, CEO of teen-clothing retailer Tilly’s Inc., said in an interview. “Part of that was our problem. We may have been offered styles that we said no to, because we were too gun-shy to take a chance. We had no idea where the economy was going, so we were more conservative in our buying.”

Nordstrom Inc. has set a goal this year of selling through its inventory at a rate 10% faster than last year, to allow it to bring in fresh merchandise more frequently, according to Pete Nordstrom, the department-store chain’s president. “We want our customers to say, ‘Every time I come to Nordstrom there is something new,’” he said.

Retailers said there are more new products hitting stores now that the supply chain is normalising and the excess inventory of past seasons has been cleared out.

But shoppers might not see a big change just yet.

“There is a disconnect between what’s in stores and what’s being shown on the runways and in fashion magazines,” said Lucia Gulbransen, a personal stylist. “You just can’t find the newness and the fashion-forward looks you see on Instagram.”

Some manufacturers said retailers are still too hesitant to pull the trigger on big, unproven bets.

“It’s an all-around risk-averse season,” said David Katz, chief marketing officer of Randa Apparel & Accessories, which makes clothing and accessories for brands ranging from Calvin Klein to Levi Strauss & Co. “There is more pushback than usual on new styles.”

Jackie Ferrari, CEO of clothing manufacturer American Fashion Network LLC, said basics such as T-shirts, tank tops and hoodies now account for about 60% of the assortment at large, mid tier chains, up from the low-50% range in 2019. Rather than adding new silhouettes, retailers are reordering best sellers with new colours and fabrics, she said.

The issue isn’t limited to companies selling consumer goods. Walt Disney Co. CEO Robert Iger recently told investors that the company needed to be careful about which comic-book characters and stories it develops into TV shows and movies from its Marvel Entertainment franchise to ensure “newness.” “Sequels typically work well for us,” Mr. Iger said. “Do you need a third or a fourth, for instance, or is it time to turn to other characters?”

Of course, there are always exceptions. Wide-leg jeans ushered in new clothing styles, including shorter tops and chunkier shoes, and luggage with built-in phone chargers spurred demand for new travel bags. But overall, retailers are still grappling with how to get more newness in front of shoppers, some of the executives said.

Customers are impatient. Robert Smith, a 49-year-old investment manager, said he started searching out smaller, more-unusual clothing brands online after showing up at a networking event wearing the same outfit as another attendee—a black linen shirt and matching shorts that he bought at a big-box chain.

“There isn’t much variety,” said Mr. Smith, who lives in Loves Park, Ill. “If you go to one store, you see the same thing at another store.”

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

That Style, Again? How Shopping Got So Boring

Manufacturers and retailers leaned on popular goods in the pandemic and often hit pause on innovating

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.