While shopping for beach wear and back-to-school supplies this summer, don’t be surprised to find Christmas deals in the next aisle. Several retailers are starting the holiday push earlier this year—a move that industry experts say won’t guarantee improved sales.
Sears Holding Corp. has launched a “Christmas Lane” shopping portal for its Sears and K-Mart brands. The home page of Sears’ Christmas Lane shows a jet cruising over a winter wonderland scene bearing the banner, “Free shipping on Christmas Lane purchases over $60.” The site invites consumers to “beat the holiday rush” and offers stocking stuffers, as well as other (typically seasonal) deals.
Toys “R” Us, likewise, kicked off an in-store and online “Christmas in July” sale touting “scorching savings.” The promotion, which ran July 19 through 25, offered discounts on popular toys and gaming systems, including the Wii and Xbox 360. There was also an in-store component where parents could take advantage of such deals while their children made Christmas cards and participated in holiday festivities.
Though marketers usually roll out a blitz of back-to-school, swimsuit and vacation advertising during the summer months, Toys “R” Us claims there’s a need for early Christmas deals in tough times. “Everyone needs ‘a little Christmas, right this very minute,’” the company said in a press release announcing the offer.
Experts, however, characterize such promos as a balancing act, and caution marketers against selling shoppers the frills, as consumers are pinching pennies.
Mike Gatti, executive director of the Retail Advertising and Marketing Association, a division of the National Retail Federation, said though holiday sales may see a “bit of improvement” this year, consumers will still mostly be focused on the basics.
Jon Weber, a vp specializing in retail and packaged goods at L.E.K. Consulting, argued that consumers are more likely to take advantage of deals on a flat screen TV or other big ticket item that they’ve made up their minds on purchasing. But the promos might not work well on smaller ticket purchases, such as apparel. Weber added that early bird shoppers are likely to be more receptive. “Some people put it off. [But] if you put the stuff out early, you can get a little bit of a jump, especially in an economy like this.”
One reason why retailers might be more inclined to start early this year is because they want to avoid the beleaguered results of last year’s Christmas push. According to MasterCard Advisers’ SpendingPulse, holiday retail sales fell between 5.5 and 8 percent during the 2008 November and December period.
Last year, retailers bought so much inventory that they had to liquidate it because of “a softness in sales,” said Andrew Rees, who heads the U.S. retail and consumer products practice at L.E.K. Consulting. This time around, marketers reason that “if they start promoting earlier [this year], they don’t have to liquidate it,” he said.
Tom Aiello, a rep for Sears, said the idea actually stemmed from the retailer’s observation that consumer demand for seasonal collectibles—such as those created for the holidays—really starts to build up around the summer, when such merchandise first debuts.
“For the group of people who have a passion for these collections, that is a big event,” Aiello said. “We’ve seen the extent of [that demand] also build up in home shopping TV stations.”
Hallmark, for the past 20 years, has traditionally debuted its keepsake ornament line the second weekend in July. Though the collection stays out for the remainder of the year, a special offer targeted to ornament enthusiasts is available that one weekend only, a company rep said.
Though it’s still too early to tell, Aiello said initial discussion board posts on Sears’ online networking community, MySears.com, indicate the promo has been catching on so far. Sears won’t rule out future “Christmas in July” sales and compares the move to what happened when it brought back layaway. “One of the big lessons we learned was listening to our consumers and responding,” said Aiello. “If consumers have a legitimate request, we should do our best to meet it.”