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Christmas & Holiday Preview

Aug 1, 2010
by Kevin Zimmerman

Might the nation's cash registers be set jing-jing-jingling again this upcoming holiday season?

That's the early word from analysts, who believe that after the last two underperforming years, 2008's bottom-dropping-out plunge during the early days of the financial crisis, and 2009's tepid totals, holiday season 2010 could be the comeback we've all been waiting for. Just don't expect it to be like it was before the economy tanked.

"It's going to be the most boring holiday season we've had in quite some time," Janet Hoffman, global managing director for retail practice at consulting firm Accenture, told the Reuters Consumer and Retail Summit recently. "That's going to be really good news for many retailers, because what they're going to see is an incremental lift in sales. From a spend perspective, the spend is still down, (compared with levels two years ago)," added Regina Gray, vice president of strategic insights at credit information company, Experian. "Consumers are still going to be very conservative this year. While confidence is increasing that doesn't mean that spending will increase."

The holiday season, which unofficially runs from Thanksgiving into the first week of the new year, can represent as much as 40 percent of annual sales for some retailers. A leading indicator of how the season may shape up, the so-called "Black Friday," that takes place immediately after Thanksgiving Thursday, has thus become an even more closely examined bellwether than in years past. But eager retailers have increasingly been inflating Black Friday in recent years, adding early bird sales in the days or even weeks before Thanksgiving even takes place. This year will be no exception, according to Consumer Electronics Association (CEA) chief economist Shawn DuBravac, during his "Consumer Technology Reality Check '10" presentation at the CEA Line Shows event in June.

DuBravac forecasted, "A longer Black Friday than ever. Retailers will be looking to drive momentum early, so expect very early promotions. Cyber Monday is now Cyber Week. Events drive traffic. Retailers have learned this, so expect more of it," he said. "And we have exported Black Friday," he added. "'Black Friday' was the top Google search term on the day after Thanksgiving in Syria, Israel, Greece, in countries that don't celebrate Thanksgiving. It's now a global event." Describing the current economic climate as, "mediocre at best," DuBravac said sellers should remain cautious of the "delicate handoff the economy faces, from a government stimulus-driven surge, to one that must be moved forward by private industry."

The uptick has certainly been gradual for most product categories. Same-store holiday sales at stores open for at least a year were down by 5.6 percent in 2008 compared with 2007, according to the International Council of Shopping Centers. Last year they rose 1.8 percent, while same store sales in May were up 2.5 percent. Matthew Katz, the global retail practice leader at corporate consultancy AlixPartners, told Reuters that even a low, single digit percentage gain over Holiday '09 would be a victory, predicting that most sellers will avoid building up inventories as they have in years past, in order to lessen the risk of having to cut prices drastically to move product. "I'd rather walk away from sales than have inventory," he said.

The steady-as-she-goes spirit is in full effect at Koehler Home Décor (www.koehlerhomedecor.com), according to president, David Koehler. "We've been doing just fine, just as well as ever," he says. "I'd say that overall sales have been average, and that they were average for the holidays last year." Koehler Home Décor, as its name suggests, offers a wide variety of items, making it difficult for Koehler to pick out one or two best sellers. A recent Fourth of July sale spotlighted such inventory as a leopard print beach combo tote (complete with coordinating pillow and roll-out bamboo mat) at a wholesale price of $4.98; a country kitchen birdfeeder ($6.98); and a 13-inch Moroccan candle lantern ($4.98).

Koehler says the company also regularly updates its wholesale promotions for seasonal sales, with recent deals including a "Fairy maid" water fountain ($75.56), a "Pineapple" wall fountain ($46.16) and an ocean creature animal sculpture by artist Robert Wyland, with another miniature sculpture (free with purchase) at $16.02. "Having a variety is a big benefit for us," Koehler says, noting that his company sells everything from books and toys to textiles, dinnerware, and bath and body products, with seasonal items (including Halloween decorations, figurines, and candles, and Christmas ornaments, stockings, wreaths, and cookie jars) always a regular feature. "We're putting up new items all the time, as they become available."

Likewise, at country crafts specialist Whimsy Diddles (www.whimsydiddles.com), co-owner Elizabeth Connet is expecting business to be, "Level with what we did last year; no major increases." Connet says that Whimsy Diddles caters to the wholesale needs of small gift shops, crafters, boutiques, gallerias, and Ebayers, offering its line of folk toys, marionettes, signs, hooks and the like, at a $50 minimum buy. The company also offers a full line of cookbooks, CDs and DVDs, clothing and handbags that go beyond the normal "country crafts" concept.

For all its inventory, however, Whimsy Diddles does best with its "$1 and under," category, Connet says. "People are still looking to be more frugal, and those are the items that sell the quickest. It's our most popular category." A primitive Santa Claus bell selling for $0.65 leads the store's Christmas items, with many other ornaments priced in the $1 to $1.65 range. A primitive Nativity mobile is priced at $4, while a Christmas sleigh bell "Jingle Bells" sign, complete with a tea stained tag reading, "North Pole Bell Co.," goes for $6.50.

"It's been steady," remarks Greg Harris, owner of Colossal Home & Gift (www.colossalgifts.com). "We've seen a marked increase in sales recently, thanks to our advertising, but it has not been a landslide. Holiday of '09 was better than it had been in the past. We saw more traffic and got a better response, and we're hoping to repeat that this year."

As with Whimsy Diddles, Colossal's sheer volume of categories prevents Harris from being able to pinpoint a particular best seller. Instead, it's the price points where he's noticed a trend. "The $50 and below category tends to be our most popular," he states. That category includes everything from wall art ($24.95) and 20-piece flatware sets ($49.95), to birdbaths ($39.95) and wildlife sculptures ($49.95).

"Where we are in the time of year right now is historically our lull," Harris says. "After Valentine's Day we'll get a bit of a bump at Mother's Day, but we don't start seeing real activity until August/September, which is when it picks up for the Christmas season." Solid holiday-themed sellers traditionally have included Colossal's dozen tree ornament sets ($24.95) and ten-piece Nativity set ($19.95), as well as silver or gold star tree toppers ($3.50) and a snowman-themed tree skirt ($24.95).

At McBeth Corporation (www.wholesalecentral.com/mcbethcorp/Store.cfm), which serves the book, gift, and novelty store market with auto accessories, greeting cards, calendars, seasonal items, activity books and the like, president Gary McBeth reports that first quarter sales were up by about ten percent. While the second quarter was, "a little softer," McBeth expects a "huge" second half of the year, as it's in the midst of a "20 to 25 percent" expansion of their customer base. The cause of that expansion is simple, McBeth says - trade show attendance. "We went to 15 last year, and we'll be at about 22 this year," he says. "Along the way we've picked up a lot of stores that haven't bought from us before, so we're expecting big things as we head towards the holidays."

Greeting cards remain a big seller for the company. "They've always been very consistent sellers for us," McBeth says, "and this year we'll be adding a new line of stationery." Cards are made available on a seasonal basis, but usually sell for $2 per box of twelve. Holiday items include a ceramic "bell girl" for $7.44 per set of three; bell-shaped glass tree ornaments at $3.75 each; and a Nativity coloring set (including crayons, scribble pad, and coloring book) for $9 per set of six. McBeth also does a significant amount of business with Christian bookstores and schools, and does well with the likes of Bible tab verse marker/finders, priced at $7.11 per set of three ($8.10 per set of three in Spanish).

At Glimmers (www.glimmersinc.com), which specializes in light-up jewelry and other home products, founder and owner Jill Flynn says anything star-shaped is currently selling well. Lest one think that stars automatically mean Christmas, however, Flynn explains, "They really are multipurpose, and we sell them year round. We do a good business with weddings, graduations, any celebration, really, as well as cocktail parties and dinner parties. All of our products light up, so they're kind of universal. They're good for anything."

Indeed, Glimmers' inventory includes a set of light-up star earrings, measuring 2" x 1-1/4", at $15 each ($7.50 for orders of two or more); heart-shaped light-up pins ($5 each for orders up to ten, $3.75 for 11 to 49; $2 each of 50 or more); Christmas tree-shaped light-up pendants in three colors ($5 each); and a gold teddy bear light-up pin at $6 each.

"Our starlights are by far our best selling items, and have been for some time. Our whole attitude," Flynn says, "is, 'Who doesn't want to be a star?'" Glimmers is currently in the midst of what Flynn terms a "complete overhaul" of its website, which will focus more on its stars and feature a streamlined payment system.

For more information:
David Koehler, President
Koehler Home Décor
205 SE Spokane St., Ste. 300
Portland, OR 97202-6487
Tel.: 866-669-6536
Fax: 866-669-6550
Email: www.koehlerhomedecor.com/contact.html
Website: www.koehlerhomedecor.com

Elizabeth Connet, Co-owner
Whimsy Diddles LLC
340 Tuckerton Rd.
Tabernacle, NJ 08088
Tel.: 609-560-1323
Email: Liz@whimsydiddles.com
Website: www.whimsydiddles.com

Greg Harris, Owner
Colossal Home & Gift
2220 South Real Road # 67
Bakersfield, CA 93309
Tel.: 661-832-7882
Fax: 661-770-9944
Email: colossal.gifts@att.net
Website: www.colossalgifts.com

Gary McBeth, President
McBeth Corporation
P.O. Box 400
Chambersburg, PA 17201
Toll Free: 800-876-5112
Tel.: 717-263-5600
Fax: 717-263-5909
Email: mcbethcorp@supernet.com
Website: www.wholesalecentral.com/mcbethcorp/store.cfm

Jill Flynn, Founder and owner
Glimmers Inc.
3130 La Selva St. Suite 304
San Mateo, CA 94403
Toll Free: 800-578-8276
Tel.: 650-578-8276
Fax: 650-578-8674
Email: jflynn@glimmersinc.com
Website: www.glimmersinc.com

Topic: Product Trends

Related Articles: Christmas  Holidays 

Article ID: 1350

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