Happy Halloween! Oh wait, Halloween isn’t for another month, you say? But I’ve seen the candy and pumpkins all around for weeks now! And I could have sworn I saw a kid ringing my doorbell asking for candy… or maybe that was just a door to door salesman.
Regardless, it seems as if stores are pushing their seasonal offerings out sooner and sooner each year, but is there a method to the madness? The reason might be more sobering than you think and it may even be critical for many small businesses’ success.
Competition is fierce in the world of retail and especially retail marketing. For stores like Kroger and Publix, profit margins are already razor-thin. They need to stay highly competitive, so they’ll throw Halloween candy out well before October. I can live with that, since giant bags of Kit-Kats never hurt anyone.
Where it starts to hurt retailers is in other industries where consumers can purchase many seasonal items year round on the internet. Just fifteen years ago it would have been difficult to find Halloween or Christmas decorations outside of the seasonal quarter. Fast forward to 2014 and buying an inflatable snowman on Amazon in the middle of May is just a click away.
Retailers such as Target and Walmart are very aware of this shift and it has led to their online sites stocking holiday items year round. However, many consumers have shown backlash when the brick and mortar physical stores begin selling holiday items too early.
In the internet age, consumers flock to social media sites to condemn retailers for their pervasive marketing. These companies are struggling to strike a balance between staying competitive and being respectful to consumers.
Conveniently, there’s a marketing term for all of this, coined in the mid 1980s. The industry refers to it as ‘Christmas Creep’ — the extension of holiday marketing well into other months. This Christmas Creep, however, is not at all scary for small business owners.
Many small businesses live and die off during the holiday season. If anyone reading has experience owning or working for a small business, you know that the holiday season (usually from early November to right after Christmas) is where many of these companies make the bulk of their income. This keeps many afloat year to year, so they rely on this Christmas Creep to allow them to sell as much as they can in the short period of time that they have.
There’s two huge underlying issues here though that give a one-two punch to small business owners and many retails in general. For one, like I mentioned above, many shoppers are switching to online shopping for holiday goods.
Since 2007, many consumers have gone frugal and stayed that way. Sounds like music to my ears, but for mom and pop shops and niche market retailers, the consumer spending just isn’t there. The middle class, or what’s left of it, isn’t increasing its wealth. In turn, its spending has been stagnant.
The result? Price cuts, stiff competition and the devaluation of brands. Plus even more price cuts. This is great for the consumer, but if you see a TV marked down 80 percent, wouldn’t you hold off on buying it? It might be 90 percent off next month! Plus, with the seemingly shrinking middle class, is there any growing consumer group out there to spend any money at these small businesses?
Only time will tell, but my prediction is we will start seeing retail making a shift into a new era. In the current state, retailers are in a race to get the lowest prices and extending the Christmas Creep. They will soon need to rethink their plans when the well of eager, spend-crazy consumers runs dry.
