Halloween in August?
While some customers seem to lament the arrival of Christmas promotions in July, is Halloween arriving in August any better?
An article on NPR explored the reasons why Halloween costumes, candy and decorations appear to be showing up well before Labor Day.
Purdue University retail management professor Richard Feinberg told NPR that retailers are putting out seasonal merchandise – whether Christmas, Halloween, St. Patrick’s Day, Valentine’s Day or other holidays – earlier to capture each planned holiday spend.
"The marketplace is so competitive that they can’t take a chance that people are going to spend their $50 somewhere else," said Prof. Feinberg.
Earlier in-store merchandising also creates a larger selling period while extending the time before an item goes on sale, said Dinesh Gauri, assistant professor of marketing at Syracuse University.
But Marlin Hutchens, market vice president at Walgreens, told NPR that one of primary reasons seasonal items are appearing on the floor earlier is because of logistics. "There’s not a great deal of storage space in stores," he said.
Unmentioned in the article was the growing popularity of Halloween, which has become the third largest party day behind New Year’s and Super Bowl Sunday. According to the NRF BIGResearch Halloween Consumer Intentions and Actions Survey, the total amount consumers planned to spend for the Halloween holiday overall in 2010 reached $5.8 billion, steadily increasing from only $3.3 billion in 2005. Total planned spending on costumes over that five-year period grew to $2.05 billion from $1.15 million in 2005; Halloween candy, to $1.78 billion from $840,000; and Halloween greeting cards, to $350,000 from $140,000.
A study by IBISWorld still ranked Halloween as the sixth largest retail sales holiday. According to its Holiday Spending Sized Up report, Christmas led the way by far with $135.2 billion in retail sales spending; followed by Thanksgiving, $29.0 billion; Valentines, $18.4 billion; Mothers Day, $16.8 billion; Easter, $15.0 billion; Fathers Day, $9.8 billion; and finally Halloween, $6 billion.
NPR generally found customers somewhat indifferent to the early arrivals with a few minor complaints. Ryan Tilden, a shopper in Washington, D.C., told NPR, "It just makes me feel rushed."
But Walgreens’ Mr. Hutchens said grumbling doesn’t appear to impact sales. He said, "Some people will complain as they’re putting it in their basket."
- Why Stores Sell Halloween Stuff Before Labor Day – NPR
- After Spooky 2009, Halloween Spending Bounces Back to ’08 Levels, Halloween Spending and Retail Buying Trends 2005-2010 – Sales Predictions – National Retail Federation
- Halloween Retail Spending Plans For Costumes, Candy & Decorations – Comparison – About.com
- Holiday Spending Sized Up – IBISWorld
- Bah, Humbug to Christmas in July Promos – RetailWire
Discussion Questions
Discussion Questions: What are the pros and cons of early seasonal holiday selling for events outside of Christmas? How important is an early start to retail performance for Halloween?
Having worked for a party supply superstore chain, I think I understand the method behind the seeming madness.
The short answer is, when you’re doing the kind of massive re-set that Halloween requires, you want to do it during a low traffic period…and that would be August. We always brought our re-packed decorations out onto the floor in early to mid-August as phase 1 of the floor re-set.
So while it sounds “right” to say that the consumer is being pushed to shop earlier, and while that is certainly true around the Christmas season, it really isn’t quite accurate for Halloween. It’s done so that stores have the time and personnel to do it right.
I’m sure that most consumers would say that August was too early for Halloween sales. However, the truth is that Halloween is big business and I think it makes sense for retailers to grab some early profits while back-to-school traffic floods the stores.
Trends indicate that consumers continue to delay purchases later and later. While Back to School, Christmas, and Easter have been extended by the retailers, a higher and higher percentage of the purchases have occurred closer to the holidays.
The extension of Halloween makes no business sense. It just adds to inventory carry and slows turns. And with this holiday in particular, it makes less sense. Consider how many times your kid changes his mind about who he wants to be for Halloween. As for a big party day, I don’t expect to get my invitation for another month and it will probably be from someone who doesn’t even know they are having a party yet.
Mark this one up on the “silly” side of the ledger for retailers.
One key advantage to early merchandising of consumables (like candy) is that the retailer often gets multiple purchases throughout the season. In fact, the stages of consumption for holidays like Halloween and Christmas are so well documented that the manufacturers offer different types of items and packs to fit consumers needs in those stages. For example, decorative “dish items” that fit the season are often purchased, displayed (and consumed!) in the home long before the traditional trick-or-treat products are purchased. It all adds up to getting more total dollars out of the holiday.
I have to respectfully disagree with my colleagues. Most people I know get an almost visceral response to super-early marketing. Heck, some stores have Christmas things out. Is this the best we can do?
Early starts have been going on for years in retail. Dollarama had Halloween merch up in early August and the sell down already started. It pays to get the jump on the season, especially if you have high traffic. The last thing any retailer wants is leftovers to box or mark down. Mr. Hutchens is spot on. Yes, the customers mumble to themselves about how the summer is over and, “Is it Halloween/Christmas already?” But I’m seeing seasonal get purchased along with back to school.
Let’s start with the fact that Halloween is both big business and risky business. While there’s a lot of money to made, anything left over on November 1st has to be either discounted heavily or packed away. Heavy markdowns and/or packaways can cut into the profitability of the season pretty significantly.
One of the best retailers I’ve seen at managing seasonal programs is Christmas Tree Shops. They are fully invested right now in Halloween, but don’t wait, because by the middle of October their assortments will be broken, and they’ll have moved on to Thanksgiving and Christmas.
The key to making money with seasonal programs is to get in early and get out early. So it makes perfect sense to have Halloween out now. It won’t make any sense, however, to be fully stocked on October 20th.
Capturing seasonal sales first is key to driving full-season purchasing, and driving overall tonnage and revenue. Most of the candy purchased before Oct 15 is consumed before Halloween.