Holiday Shopping Report: Christmas Comes Early

The holiday season is a crucial selling period, with some companies generating more revenue in these few months than in the rest of the year combined. Manufacturers and retailers hope that marketing products early, providing in-store destinations and demonstrating the value of their products will help stave off the effects of a sluggish economy. In September, Walmart announced it would reduce prices on its most popular toys and fast track the opening of Christmas shops in its stores. The 2008 "Holiday Shopping Intentions Survey," conducted on behalf of Walmart, found that consumers would start their Christmas shopping earlier this year, with some shoppers starting a full three months earlier. While shoppers are likely eyeing price tags, Pam Greer, senior director of strategic sales planning and consumer insights for El Segundo, CA-based Mattel Inc., says the company's research has shown it is all about the shopping experience during the holidays. "Shoppers want to hear holiday music, they want to smell evergreen and they want to experience Christmas. There is a real desire to experience the joy of the holidays, even during the shopping experience."Mattel completes quantitative interviewing of more than 1,000 families several times a year. Steve Labella, senior director, strategic sales planning for Mattel, says, "It helps us to determine drivers toward retailer satisfaction, identify opportunities to improve shopper satisfaction and understand how toy shopping fits into the overall shopping trip."Mattel's primary holiday shoppers are adults -- moms, grandmas, aunts and uncles -- who want to have fun while buying gifts for children ages 5 through 9. Greer says, "We were able to draw a clear link between the likelihood of customers buying something and how much they spend based on how satisfied they were with the retail environment." From gift buying to entertaining, women play an integral role during the holidays. "Our shopper research suggests that moms make wish lists early in the season," says Jeni Burford, senior manager of visual merchandising for East Aurora, NY-based Fisher-Price Inc. "We often hear that grandparents, aunts and uncles ask for the list so they can choose what they might like to get the child."Typical customers for Norwalk, CT-based Pepperidge Farm are women who entertain their family and friends throughout the holidays and want easy entertaining solutions. The company talks with its customers throughout the year. "We carve out time to ask them specifically about the holidays, the assortment and how they use the products," says Wendy Bateman, director of integrated marketing for Pepperidge Farm. Christmas Co-MarketingTo provide solutions for shoppers, Pepperidge Farm and Campbell Soup Co., Camden, NJ, have joined together for the first time to create an in-store destination for shoppers (Campbell Soup acquired Pepperidge Farm in 1961). Bateman says, "Consumers can go to the display area to find all the products they need to prepare a holiday meal and entertain." The displays launched in early November. "There are consumers who wait for the day before Thanksgiving [to do their food shopping], but there are people who start preparing in early November," says John Faulkner, Campbell's director of brand communications.The companies began securing floor space last year. "For this holiday season, we approached our customers last year saying we can provide them with bigger and better solutions if they allow us to come together and have this space in-store," Bateman says. Securing floor space at retail is difficult any time, but even more so during the holidays. "We go out and fight for our floor space," says Gary Heck, president and owner of Korbel Champagne Cellars, Guerneville, CA. Korbel works with buyers at retail to get its promotions in the stores, then ships everything to the distributors who set up the displays.Sixty percent of Korbel's business is done in the last three months of the year, which is also when Korbel spends the most of its marketing dollars. "TV alone is a $5 million ad purchase," Heck says. "It is a must-sell time of year." Korbel uses Nielsen ratings and Internet tracking studies to better understand its shoppers, whose ages range from 25 to 54. "We've also learned in the last three months that 12% of our customers are Hispanic and 10% are African-American. That is what the research and the Internet surveys do for us," Heck says. The company has used the demographic information to tweak campaigns, for example, tapping into the Cuban tradition of toasting the New Year with 12 grapes and champagne by cross-promoting the two products.Even industry leaders aren't immune to limited shelf space. "Having a good brand name helps you, but it really comes down to the right toy, price point and availability," Fisher-Price's Burford says. "Slotting is based on productivity -- how many of the items can sell through."Fisher-Price relies on interactive displays to help sell toys when a toy's box can't fully communicate the value and play pattern of the toy. This year, the company created an interactive display for Spike the Ultra Dinosaur, which retails for about $140. "We want consumers to know what the toy can do. This helps consumers justify the cost when they can see all the features of the toy," Burford says. "Christmas" or "Holidays"?Those interviewed say they decide on their holiday promotions about a year in advance, and they all face the decision of promoting a specific holiday or the overall season. Pepperidge Farm's graphics embrace Christmas. "For the most part, we have found consumers are very open to celebrating Christmas. They have told us they like the iconic shapes that are associated with the holidays," Bateman says. Toy manufacturer Wild Planet only uses special holiday packaging on one of its toys. "Logistically, it would be challenging to get the correct package on and off the store shelves during the right window, and any leftover holiday packages on shelves in January would make the product, though it was released just weeks ago, seem outdated," says Drew Stevenson, senior vice president of worldwide sales, Wild Planet Entertainment, San Francisco.Susan Stribling, spokesperson for Atlanta-based Coca-Cola Co., says consumers expect to see some sort of holiday packaging on its products. "We start getting calls in November from customers asking when the holiday packaging will be out," she says. The company rolls out its holiday packaging in early November and it frequently sells out before Christmas arrives.Coca-Cola has been featuring Santa Claus on its packages since 1931. Fifteen years ago, the company introduced its polar bears, which embrace winter more than a specific holiday. "We have something for everybody. We have things that are more secular and less secular," Stribling says. Coca-Cola utilizes several kinds of promotional materials, including special glass bottles, packaging, stackers and static clings. "We activate it across all channels, from convenience, retail, mass merchants." Stribling says the company has sales teams working with its major partners to get retail displays in place. Nearly all manufacturers are trying to direct customers to their websites, but when it comes to online hits, OfficeMax is among the top. The Naperville, IL-based company boasts one of the top viral campaigns with www.ElfYourself.com, which lets visitors put their faces on dancing elf bodies. The campaign appeals to all age ranges and brought in over 190 million visits last year, says spokesperson Jennifer Rook."When you're thinking of holiday shopping, you don't necessarily think of OfficeMax," according to Rook. "We know this, so we wanted to have some fun." OfficeMax first launched the elf site in 2006. Last year, it took its online campaign into the store with elf endcaps and signage. To freshen up the campaign this year, OfficeMax launched the website a little earlier, and consumers can choose from four different elf dances as opposed to just one last year. "You'll also be able to save your elf. We had a lot of requests from customers last year who wanted to download it and use it," Rook says. Despite concerns over the economy, manufacturers remain optimistic that the spirit of the season will keep shoppers in the stores. According to the Holiday Shopping Intentions Survey, 61% of Americans say they do not plan to cut back on how much they spend this season, and those who do plan on cutting back will only cut back $50 or less. Coca-Cola's Stribling says, "We do always tend to see that lift during the holidays and hope that it will be the same this year."

Holiday Shopping Report: Christmas Comes Early

P2PI MEMBERS

JOIN P2PI

Related Topics

Related Images

Business Topic

Company

Market Segment