The Christmas Creep. No, not the colleague from accounts who puts the moves on you at the office party. This creep refers to retail: the appearance of holiday merchandise earlier and earlier in the year.
It happens because retailers want to sell their wares at full price. The sooner stock is in stores, the longer the full-price run is ahead of the holiday discounting period. There’s also hot competition to get consumers’ attention first. Retailers want to beat their competitors in communicating their holiday stories.
And it’s not only Christmas having a longer red carpet rolled out for it. Back-to-school, Father’s Day, Valentines and others have all seen their promotional build-ups extended in recent years. Symptoms of a highly competitive and crowded market, and yet, consumers respond to it. After all, retailers wouldn’t do it if consumers weren’t buying. They’re far more sophisticated than that!
But that’s not to suggest there’s no limit on how early retailers can hang the mistletoe. Once holiday fatigue sets in consumer interest dwindles and the much-needed Q4 sales results suffer. So, is this year’s Christmas creepier than ever? Let’s take a look.
What counts as ‘holiday merchandise’?
To understand whether or not holiday merchandise is arriving earlier, we have to know what constitutes festive stock. In apparel, it’s simply not as easy as ‘here are the ornaments and gift wrap’. Sure, fancy party dresses aimed at the festive period arrive in autumn. But where else do retailers increase stock especially for the holidays? Here’s where:
- Cashmere. Retailers grow their cashmere offering by 38% in November compared to October. Heading into December there’s a further 16% added to their offering.
- Fur-trimmed items and accessories. Sell outs of fur-trimmed items grow 75% in December.
- Leather gloves. Sell outs climb by 110% in December compared to November. These arrive late in the season, peaking in December.
- Bathrobes and dressing gowns. Three times as many of these sell out in December as in November.
- Bags. Almost 2.5 times as many bags sell out in the last quarter of the year than Q1.
- Value-added detailing, like jewelled items, embroidery and bright jewel colors.
Diagnosis: When Did the Creep Start?
Looking at 2014’s data for a set of 69 influential US and UK retailers, we can see that new product arrivals spiked in August and then spiked again, higher this time, in December. That suggests an early arrival of new season stock which serves the holiday period but is bolstered by a late injection of season-specific items in December.
Comparing the same retailers from 2014 to 2015, we can see that this August had about 21,000 fewer products arriving online. Where did they go? Scroll back to July. What you’ll see is 22,000 more new product arrivals in July 2015 than in July 2014. So retailers are bringing stock in earlier. But it is holiday merch?
We can tell that sell outs in the accessories category increase in November and December. So much so that it’s the category with the highest number of sell outs during December. Based on that, we can tell when retailers introduce dedicated holiday stock by the attention they give the accessories category. Year-round, ‘tops’ is usually the biggest category. But in August, something shifted. Twenty-seven percent of products introduced fell within the accessories category.
What that tells us is that retailers are increasing new arrivals in July, but it’s Fall stock they’re giving time to shine ahead of the Christmas creep. This means the new arrivals of August, though down in number, are more targeted to the holidays. It’s a smart move.
How does it affect the luxury market?
We’ve seen that lower income consumers begin their holiday shopping earlier. Does that mean luxury spending starts later in the holiday season? Let’s see.
Data from 2014 shows us that sell-outs in luxury accessories peak in November. The average age of those accessories selling out in November is 90 days, which would mean they arrived in August-September. Sure enough, this year August’s new arrivals lifted 54% from July. That’s earlier than last year where new arrivals of accessories lifted in September. We’ll be watching to see how that impacts discounting late in the season.
Who was the first to break the news?
Value retailers take some flak for being the earliest to promote their holiday wares, so it may come as a surprise to learn that UK luxury department store Liberty was the first to promote its holiday shop. This year, its newsletter promoted Christmas stock on September 5, a day earlier than last year (which is necessary if they want to send on a Saturday and would see them sending even earlier, on September 3, next year to stick to their pattern!).
Harrods first used the C-word on their homepage October 6 this year, a whole lot later than 2014 when it introduced the Christmas bear in a newsletter on August 19! Neiman Marcus revealed its free ornament on September 18 this year, a day earlier than last year. And Marks & Spencer announced its Christmas shop on the October 9, five days earlier than 2014. So far Walmart has stayed quiet on the subject, and although T.J. Maxx promoted cashmere on October 4, it didn’t use any festive wording or visuals until October 19. Such restraint.
And that’s the way it will have to be. If retailers want to bring festive stock in earlier, they’re going to have to get smarter in the way they talk about it to avoid consumer fatigue. Certainly there are segments of their audience who are purchasing earlier – but not all shoppers need to hear about it.