Columbusdayhalloweenblackfriday season!
By the time the following words are published, the holiday pop-up store for Toys “R” Us will have been open for more than three weeks; Wal-Mart’s early bird preseason toy promotion also will be in its third week; and Sears will have mailed its new Wish Book catalog—all more than a month before Black Friday, the traditional start to the holiday shopping season.
This year’s seasonal promotions are so early, in fact, that many overlap the promotional activity around the Halloween period—some even preempt it. Which prompts the question: Is there such a thing as starting holiday promotions too early? I mean, are consumers even ready—financially or psychologically—to shop for holiday gifts when they’re still paying off back-to-school bills and it’s 80 degrees outside, as was the case this year across much of the country over the Columbus Day weekend?
When we recently put that question to the marketing team at Toys “R” Us, upon a walk-through (on what happened to be an 80-degree day in early October!) of its four-month pop-up store in the Greenwich Village neighborhood of New York (see full story, page 4), we half expected to hear about a marketing campaign designed to push a heavily discounted, limited assortment of merchandise, shrouded in a stealth initiative to drive store traffic and capture consumer data.
Instead, we were pleasantly surprised to learn that Toys “R” Us was actually using its pop-up store as, well, a store, and not merely a marketing vehicle, as the concept has come to be known. Doubling as a destination for Halloween costumes (hence the Oct. 1 opening date), this pop-up is anything but impulsive, featuring a full range of toy categories, from plush to Playstation; a Santa staging area (starting Nov. 1); and well-thought-out store fixtures and decor—all of which give the four-level, 25,000-square-foot store a greater sense of permanence than I’ve ever seen in a so-called “pop-up.”
That isn’t to say TRU’s “Holiday Express” store is perfect. For one, the company has done very little mainstream promotional activity to draw shoppers, presumably relying on word of mouth and spontaneous, viral marketing to pique consumer interest. And second, price points, at least for now, are not intended to encourage early shopping based on steep savings or unique time-sensitive promotions.
So how are shoppers—many of whom have barely thought about Halloween, let alone Thanksgiving—expected to direct both mind and money away from things like fall fashion, autumn decor, Columbus Day sales and Halloween candy, and orient themselves instead toward December holiday gifts?
That question becomes exponentially more complex when the selling space in question involves the 3,500 stores that make up Wal-Mart’s domestic store network. And yet something deep inside the data-mining riches of Wal-Mart has led marketers to push the envelope once again this year by starting its holiday promotions two weeks earlier than last year’s “early holiday sales launch” at the ripe date of Sept. 30. That’s when Wal-Mart put a selection of what it deems the “Top 12 Toys of Christmas” on sale for 10% to 50% discount rollbacks as part of a deliberate effort to “[start] early and aggressively with unbeatable prices.”
When it comes right down to it, though, whether the widespread rollback actually gets more shoppers through Wal-Mart’s doors before Nov. 1 may have more to do with good old fashioned merchandising than anything else. Let’s face it, you can slash the price on certain toys as deeply as you like, but are you promoting the right toys? Are they this year’s must-have, trend-right products that kids are clamoring for and mothers approve?
And even when they do fly off the shelves, those deeply discounted sales only satisfy one part of the profit equation. As The Wall Street Journal recently pointed out, many of the toy items being heavily promoted at Wal-Mart and other retailers this October are being sold to the consumer at a retail price that is below the wholesale cost. In short, they’re being sold at a break-even point, or even at a loss. Which means, if and when the promotional effort gets the consumer in the store, there’s still the very daunting task of converting that shopper into a buyer of higher-ticket, higher-margin product.
If that can be accomplished, and if the holiday selling season can be advanced by several weeks, it certainly wouldn’t be the first time that mass market retailing has led to a shift in consumer behavior. Think about what Halloween has become over the last few years—a decorator’s bonanza, with neighborhood competitions that are starting to rival those of the Christmas season.
On the other hand, you have to be careful what you ask for. Getting consumers into stores to kick-start the holiday season is one thing. But when you encourage consumers to buy holiday toys in September, you’re still left with one crucial decision: In which seasonal department are you going to sell them? The space being used for back-to-school clearance? The one that’s already promoting Columbus Day goods? The aisle filled with Halloween fare? Or the place where you’re promoting your fall home decor?
