By Paula Rosenblum, Managing Partner
9/22/2009
Last week we talked in some length about the difficulty in analyzing August sales numbers. Our general feeling was, good or bad, they’re not really indicative of much. All the while, we were thinking that the Winter Holiday season would be our first chance to see if the consumer is really and truly ready to come out of her foxhole.
Then, in response to a question from a friend on Facebook, I glanced at a calendar and noticed Halloween falls on a Saturday this year (that would be October 31). I don’t know the dynamics of Halloween in other countries, but as a former CIO of a party supply superstore chain, I’m definitely and acutely aware of those dynamics in the US. And based on the way those dynamics fall this year, we will get a really good chance to “see inside the mind of the customer.” For retailers selling appropriate products, a Saturday Halloween is the closest thing to Nirvana.
Halloween is holiday that for most people has little to no familial or religious associations to it. No gift giving required and no “important” rituals. The primary traditions are decorations, costumes and trick or treating. The United Nations gets a nice financial pop out of it (“Trick or Treat for Unicef!”) and everyone else gets to have a lot of fun for really short money. In other words, it’s generally a low stress event. I always observed that you could have a really great time for under $100.
It doesn’t matter if it’s hot or cold, rainy or dry….kids wear costumes to go trick or treating for Halloween. And because the run-up takes a while, people also buy decorations. In fact, I’m pretty sure the Halloween decoration planogram sets are probably complete in appropriate stores. Those things don’t change much regardless of the actual day of the week Halloween falls on.
But the big money or the extra sales comes from Halloween parties for grown-ups. It doesn’t get any better than having Halloween itself fall on Saturday. Here’s how it plays out:
· Kids’ school celebrations will happen on Friday the 30th. Because it’s a Friday, those celebrations will be a little longer and a little bigger.
· Trick or treating will happen late Saturday afternoon. Very little pressure to get the kids home to do their homework, or otherwise off to bed.
· Saturday night we have The Big Party. In fact, the person I was conversing with and telling this story to said, “We’re doing our part…we just decided to have a costume party on Halloween.”
If you’ve ever worked in a store that sells or rents Halloween costumes, you know that for the 72 hours prior to Halloween night, price elasticity goes out the window. No price is too high to pay for a costume if you haven’t bought one yet. The stores are a zoo, with otherwise normal adults trying on costumes right on the selling floor, and tossing them on the floor if they don’t like them. “Store recovery” consists of quite literally shoveling piles of costumes into the back room. They’re put back together into their original bags later at night… after the stores have closed.
Interestingly, even the retailers get a bit of a boon inventory-wise. Halloween merchandise is typically re-packed and put back in the warehouse between selling seasons, so retailers don’t have to buy everything completely fresh. The only ones who suffer pains are those who have to clean up the sales floor or make sure POS systems are up and running. I suppose it’s no accident that was my last CIO job. I still raise a glass every Halloween – I don’t have to do anything anymore.
The bottom line is – this is the month to watch for indicators of how the “big” holiday season is going to go. We believe there’s a certain amount of “frugality fatigue” setting in – and while consumers will still be price conscious, people want to have some fun. It has been a nasty year. The stars are aligned. Halloween should be a barn-burner. If it’s not, we’ll know we’re not nearly out of the woods yet. If it is, things are looking up.
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