The impact of globalisation and the resulting homogenisation of foreign holidays and their respective shopping days, such as Halloween, Singles’ Day and Black Friday, has meant that there are more key trading events than ever before for retailers to leverage, writes Sophie Bailey, Managing Director at Acuity.
Christmas; the crisp winter air, the twinkling of those magical lights as the streets converge with late night shopping and mulled wine-fuelled revelry. The most wonderful time of the year... except it’s not, because Christmas now starts in September. Not a single burnt orange leaf had fallen from the trees when Starbucks launched its famed Pumpkin Spice Latte on August 23rd, heralding the unofficial start of the key trading period while also coinciding with Earth recording its warmest month on record.
The world of retail is seeing seasonality shift as consumers try to better prepare for periods of high spending. This has led to analysts in the UK penning this as ‘the Golden Quarter’ due to the high sales volumes achieved in the last 3 months of the year. Golden Quarter trading is seen as sacrosanct to the markets which deem a strong quarter as crucial to a retailer’s performance and profitability.
How retailers protect against holiday fatigue is a phenomenon called “Christmas Creep”, effectively elongating the buying windows of non-perishable products to allow retailers to better capitalise on these trading opportunities. Which is why it is now not unusual to see novelty pumpkin candles stocked on shelves in July and Christmas selection boxes on the shelves by September. This does raise a question for marketers about how to create effective marketing campaigns when the traditional holiday imagery centred around crunchy leaves and frosty fields is increasingly far from shoppers' current buying reality.
Of course, the southern hemisphere has been tackling this since the dawn of advertising time as some families swap turkeys for beach bbqs and snowscapes for sunshine. Christmas creep and the rise of the greater awareness of cultural inclusion has meant that marketers are erring away from the traditional holiday scenes in favour of more generalised holiday sentiment messaging. Coca Cola, the stalwart of traditional Christmas branding, launched its “real magic of human connection” campaign in 2021, focussing on unity, inclusion and positivity and has done away with its famous red and white Santa all together.
Brands have addressed Christmas Creep through the muting of holiday-themed packaging. Confectionary tins and boxes have changed over time to include holiday-neutral bows and snowy mountains. This allows these products to sit on shelves for longer and not be subject to significant discounting in the new year, which last year saw products like Cadbury Roses 800g tin that retailed at £8 in 2022 reduced to as little as 80p in clearance.
While we know that price and promotional planning happened for this Christmas a long time ago, brands and retailers will be monitoring early Christmas sales volumes closely to react to shopper behaviour, in order to not resort to panic discounting. Because the truth is retailers still don’t know what normal looks like; the global pandemic followed by the war in Ukraine and now the highest levels of inflation since the 1980’s has meant that retail remains incredibly volatile.
PwC’s Autumn 2023 Consumer Sentiment report suggests that spending across all categories is expected to fall in the next 12 months, with intention falling fastest in grocery and discretionary categories. Interestingly, the report points to key polarisation between age groups with all but the over 65s believing they will be spending less on groceries. They suggest “those over 65 are… refusing to trade down on choices, shop at discounters or compromise on food. As inflation eases, this could be positive news for those retailers and FMCG brands targeting older consumers.”
It is unclear whether the respondents expect to spend less because they believe that inflation will ease pricing pressures, or whether everyone is expecting to tighten their belts further. The reality is, that as the rising interest rates start to take their toll, shoppers will likely become more spend adverse.
What this means for brands and retailers is that Christmas creep is key to locking in customer spend. Black Friday will likely be the canary in the coalmine when it comes to understanding Christmas shopper intent. Retailers and brands should be mindful about the growing scepticism (and scrutiny) around Black Friday offers, ensuring these are fair and enticing, to capitalise on the early spending.
For a brand, going back to basics such as the investment in aisle displays and online product placement sponsorship will be more valuable than ever in catching shoppers’ attention and winning a share of Christmas spend, even if that’s in a balmy October.