Get ready for holiday merchandise to hit store shelves earlier than usual this year, and for retailers to roll out seasonal promotions well before temperatures drop. Discounted pricing once reserved for Black Friday and Cyber Monday is now going into effect in early October.
“Holiday creep,” the term for when retailers start selling holiday-themed items before the traditional start of the season, is a phenomenon that’s been at play for years, as retailers try to get a jump-start on sales.
This year, given that the window between Thanksgiving and Christmas is almost one week shorter compared with last, stores will have even less time to clear merchandise from shelves and capture consumers’ dollars. To make up for that time, they’re hosting holiday sales events as early as the beginning of October, before the leaves have even started to fall in many places.
For example, Wayfair is hosting its seasonal sales event, Way Day, on October 5 through October 9. Target Circle Week runs from October 6 through October 12, and Amazon Prime Big Deals Day will be held on October 8 and 9.
Walmart this year released its “Top Toys List” on September 9-15, to start tempting customers weeks before Santa’s arrival. “‘Tis the season for toys!” read a press release announcing the list.
“It’s been an ongoing retail movement over the last few years of bringing sales forward, it’s ‘holiday creep,’ or ‘Black October’ — whatever you want to call it,” said Adam Davis, managing director of Wells Fargo retail finance, told CBS MoneyWatch. “Retailers are trying to maximize sales by elongating the season to get as much share of wallet as possible.”
Getting ahead of the Black Friday crowd
Another reason for holiday creep? Limited consumer spending dollars. Most shoppers have fixed budgets, or set dollar amounts they’re willing to spend on holiday merchandise and gifts. So, retailers compete with one another for consumers’ precious dollars. If they’ve blown through their budgets before Thanksgiving arrives, stores that wait until Black Friday to reveal deals will have missed an opportunity to lure them in.
“There’s a finite budget, for the most part, of what consumers are willing to spend. And retailers want to capture their dollars earlier in the season, so they don’t get caught up in the clutter of Black Friday and Cyber Monday, being one of many companies promoting deals and getting lost in the mix,” Davis said.
In other words, consumers don’t have to wait until Black Friday to look for sales on winter coats, toys and appliances.
“A lot of direct-to-consumer companies are following the lead of Amazon, which has its big Prime Day coming up. They are following suit because they don’t want to lose out on extra traffic from consumers,” Davis added.
Aggressive promotions start now
Still, early price cuts aren’t usually as deep as those introduced around Black Friday and Cyber Monday, by which time retailers panic if they haven’t sold a substantial amount of their inventory. If consumers take their chances and wait until after Christmas to start shopping, they could secure even better deals, but there’s no guarantee that product will be available.
“Retailers like to grab customers now, in early October and November, because they can sell product at higher margins than after Thanksgiving, when they’re in panic mode because sales aren’t there and they need to rapidly discount things,” Davis explained.
Retail expert Mark A. Cohen, former director of retail studies at Columbia Business School, said that while promotional creep is as intrinsic to the holiday season as Christmas jingles, “it does get a little bit more pronounced when the calendar shifts to compress the Thanksgiving to Christmas season.”
“The march to a successful outcome is underway. And whereas traditionally, retailers would keep their promotional behavior under wraps and protect their gross margins, I think now they are more insecure than they have ever been and don’t want to have any excess inventory coming out of holiday season,” he said. “So they are promoting aggressively now.”