Dozens of heads, torsos and rows of various dismembered limbs hang on the walls of a storage room in Spaeth Design's Queens, N.Y., office. They are labeled—'Macy's, '99, Fat Man'— and belong to the ghosts of holidays past, the dozens of mannequins that have at one time or another populated the fantastical world of the famous New York City holiday window displays of retailers like Bloomingdale's, Macy's, Lord & Taylor, Tiffany & Co., Saks Fifth Avenue and Bergdorf Goodman. You know, the windows people travel from all over the world to see between Thanksgiving and New Year's.
October is crunch time for Spaeth Design. It's one of the best-known design firms making up a small but critical cottage industry of decorating department store windows for the holidays.
It's a business that helps drive foot traffic (Lord & Taylor estimates that 500,000 people pass by its windows daily; Macy's clocks 15,000 people per hour during the holiday season, up from the typical 10,000 per hour) and ostensibly boosts sales—analysts say it's near impossible to evaluate, though they try.
Construction in the holiday workshop has kicked into high gear over the last few weeks, as the shop's nearly 60 employees (30 of which are full-time) labor to meet a fast-approaching deadline. Spaeth Design has been creating holiday windows for these major retailers for over 60 years, but talks with this year's main clients, Bloomingdale's and Lord & Taylor, started late.
"We're working as we should be delivering," explains David Spaeth, owner and CEO of the shop. Spaeth runs the firm with his wife Sandra, who serves as president.
All that pressure makes sense. The holiday season rings up some 25 percent of annual sales for retailers, and window displays influence purchase on average 24 percent of the time, according to NPD research. Meanwhile, the average consumer is projected to spend roughly $805.65 this year on holiday shopping, pushing November and December sales (excluding automotive, gas and restaurant purchases) to $630.7 billion, up 3.7 percent versus last year, according to the National Retail Foundation.
Of course, the bad news for brick-and-mortar stores is that, according to the NRF, 46 percent of all holiday shopping, browsing and buying this year will be done online.
"What do the stores want? They want you in the store, they need you in the store," says Marshal Cohen, NPD's chief industry analyst. "Impulse [buying] happens in the store 45 percent of the time; impulse [buying] happens online 18 percent of the time. It's so critical for them to drive traffic to the store and then ultimately try to get you into the store, even if it means doing things the old-fashioned way. Using windows and holiday displays, and turning it into a tradition to make it have everlasting life is a critical thing for them to do."
Every year by mid-November, the retailers reveal—with ever-increasing pomp and circumstance—their holiday displays, hoping that consumers will journey to the stores to see the windows in person. (Grumpy Cat and Nick Jonas were among last year's in-store holiday celebrities.) For thousands of families, going to see the windows is something that has become a tradition and been passed down from generation to generation. "Macy's windows have become an iconic, important tourist visit," says Roya Sullivan, the chain's national window director. "As that's happened over the years, the celebration and unveiling has become more prominent."
That's true for Bloomingdale's too, adds John Klimkowski, Bloomingdale's operating vp of visual merchandising. "Holiday windows are a big part of Bloomingdale's heritage and an annual tradition for so many of our customers," he says. "Our goal is to create a unique holiday experience that is like no other store in the world."
While the retailers see holiday windows as a gift to New York, none will reveal the cost of producing them. ("You don't tell someone how much you spent on their gift," demurs Sullivan.) Analysts estimate, though, that the lavish displays cost well into six figures.
"Their TV and print ads during the holiday time far exceed the window budget …[but] if it wasn't worth doing, they wouldn't be doing it," says Cohen. "While they don't make direct revenue because they don't charge to look at the window, there's certainly increased traffic, plenty of loyalty and ultimately the store being thought of as a holiday headquarters—all to their benefit. They're not doing it out of the goodness of their heart." So much for the gift theory.
The long-standing, distinctly analog tradition is largely credited to R.H. Macy, who created one of New York's first holiday window displays in 1874. From there, retailers began to compete to create the most ornate windows in the hope that consumers would be drawn in. Seen through a contemporary lens, this is experiential marketing in its earliest form, and it's a tactic that is just as effective as it ever was.
"It is, at its best, experiential, and isn't that what we're all talking about?" asks Jean McLaren, president of marketing firm Marc USA in Chicago. "We're all trying to build an experience that reinforces the brand in some way and that builds that sense of loyalty. That's what [holiday] windows did years ago, they built up all this warm feeling about this brand and it became an experience to take your family to see."
Nancy Hansell, senior strategist at branding firm Siegel+Gale, agrees. "Window displays, and holiday windows in particular, are really effective in helping brands elevate themselves beyond a transactional experience and remind people of the wonders of shopping," she says.
It seems fitting that a design firm specializing in making fantasy a reality resides in a warehouse formerly owned by Hostess Brands. The company moved into the space in 2013 and found old Hostess and Wonder Bread signs that had been left behind. Spaeth then repurposed them, christening the space as the Wonder Factory.
Of course, that sense of wonder is also key to the design shop's morale and attitude. "We're making Christmas windows, so we have to keep things jovial," says Quinn O'Sullivan, production director at Spaeth. "It's not anyone that can work here. There are a lot of talented people that have skills that apply to this world, but they don't have the aesthetic. You need a certain innocence to be interested in this. I always say that you need to believe in Santa Claus to work here."
Even with that optimism, clients sometimes come up with seemingly impossible ideas. "Several years ago, Macy's came to us and said they would love a roller coaster for their window," recalls Spaeth. "I'm a mechanical engineer and I said, 'You can't do it. There's not enough space, there's not enough time. It takes months to design a real roller coaster.'"
And yet, Spaeth delivered. The roller coaster, made with Rollerblade wheels, is "one of the more lethal things we've made," says Spaeth. Given how fast it moved and its proximity to a giant plate glass window, the firm had to ensure it wouldn't fly off the tracks. "It took the entire summer, but we made it work," he adds.
This year, reflecting Americans' obsession with all things culinary, Spaeth Design is creating an imagined holiday world where cakes, cookies, various pastries, flowers, faceted animal sculptures—all sorts of typically static items—come to life. The props department even found the best formula for a realistic-looking whipped cream to cover the cakes for one of this year's displays (using light spackle is key).
"This is the first time we've done cakes, and they look amazing. Unfortunately it's probably the last time we'll ever do cakes," sighs Spaeth. "This always happens. We'll invent something for our own use, use it once and never again."
That's the business, creating a realistic holiday spectacle that catches the eyes of passersby over an intense, brief and all-important six-week period each year. "Everything has to look real, but it can't be real," cautions Spaeth.
What needs to be real is the sales lift that holiday window displays will bring New York's big retail stores. Because if that share of online shopping steadily clicks above 50 percent, come a few Christmases from now, those stores might not even be open anymore. Bah humbug.
This story first appeared in the Nov. 2 issue of Adweek magazine. Click here to subscribe.