Photo: Party City
Did social media spook Party City’s Halloween sales?
Party City said sales during the Halloween selling period came in lower than expected due to “two fundamental shifts” in the marketplace. The surprising one cited by the retailer was the rise of a do-it-yourself (DIY) costume trend as younger Halloween revelers look for more unique ways to dress up and display their creativity on social media.
On its third-quarter conference call last week, Jim Harrison, CEO, pointed to a survey from CompareCards by LendingTree that showed 48 percent of Millennials purchase Halloween articles so they can include them in social media posts. Thirty-seven percent of Gen-Zers and 30 percent of Gen-Xers said the same versus only five percent of Boomers.
Similar research from the National Retail Federation shows social media as a growing source of both Halloween inspiration and display. Mr. Harrison said, “There definitely is a do-it-yourself trend and we need to market and merchandise this trend more effectively.”
Party City plans to amplify costume accessories, which offer ways for DIY-costume makers to “mix and match” to support the trend. Mr. Harrison said, “We need to continue to build out this aspect of our portfolio, expanding the products available to consumers, to create their own unique costumes and images. More importantly, we need to do a better job of communicating our offering to these generations of consumers going forward.”
He added, “We already have a larger more penetrated costume accessories business than our mainline competitors but we’ve not effectively used it as the competitive weapon that it is.”
The second major shift the chain mentioned was an increase in costume buying, including costume bags, being done online. The migration was expected, said management, and is “addressable” as Party City increases the emphasis of its accessories online and further capitalizes on BOPIS opportunities made possible with its store base. BOPIS represented 40 percent of consumer demand on partycity.com during October.
Party City officials stressed they don’t see any “systemic or a structural issue” with the Halloween holiday. According to NRF, Halloween spending has exploded from $3.3 billion to $9 billion over the last 15 years, and some years have showed declines. The industry looking forward to a boost in 2020 because Halloween lands on a Saturday.
Discussion Questions
DISCUSSION QUESTIONS: Does it make sense that social media is driving a DIY Halloween costume making trend? What insights, if any, does the apparent trend offer into how social media may be influencing changes in fashion and other categories?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Ben Ball
Senior Vice President, Dechert-Hampe (retired)
I am sure that DIY costume making had something of an impact. However, I think that this is also an excuse to hide the real dynamic – namely that other retailers like Target have really upped their game on Halloween and are taking a greater share of the market. On top of that, the pop-ups by Spirit Haloween also grabbed more share. The blunt truth is that Party City is being squeezed, not just on Halloween but on all occasions.
Halloween is the only holiday where the people are the event. The level of family involvement and creativity I saw this year was impressive. Thanksgiving is all about food and family, Christmas and Easter are either religious, Santas and bunnies or both. As for whether DIY is a positive for Halloween sales, I think it will be impossible to know unless you limit the category definition to things purchased in Halloween stores or sales. How do you recognize a Walmart sheet that masquerades as a ghost in your syndicated data?
There are numerous unintended consequences of the birth, life and, hopefully, eventual death of social media. Many of those consequences e.g. this article, bullying, suicides, and disinformation, are negative. Where as the use of the internet to get immediate, round-the-clock, medical responses for treatment from a team of doctors in another time zone is a plus for humanity, social media does not – in this humble person’s opinion – measure up. This is one added disease that humanity doesn’t need.
If the excuse of people making their own costumes being the reason for poor sales held any water then by extension, restaurants should all be out of business because people can cook their own food. That’s a pretty flimsy excuse.
I was in three Halloween stores this season. Two were typically boring … 90 percent product, 10 percent theater. As you would expect, they weren’t that busy.
The third was 60 percent product and 40 percent theater. Great fun and experience and — you guessed it — jammed with people. Look, if you can’t make Halloween a great experience in your stores, then you’ve got a big problem … the Grim Reaper is likely around the corner.
100%! Halloween costumes are traditionally junk for the masses of shoppers. Kids don’t want to wear a plastic throw-away costume that they freeze in when they can go to goodwill or supplement with real clothing. The onesie trend and Amazon is likely more of a culprit to sales being down. Halloween stores should be more theatrical and focus on a family experience vs. an online ordering experience. #1 complaint I heard from parents was “long line” so they bought online. Kids (9-12 years old), thought the costumes were stupid and essentially not relevant to what they dressed up as.
Blaming the customer for your sales lags never comes off well. Party City’s job is to come up with products and sell products that customers are interested in. This old saw that they’re all online is getting old. Do your darn job and use your brick-and-mortar stores effectively.
I smelled this coming (and am actually going to write a blog about it today). I was watching TV the week before Halloween and Party City was running a 20 percent off promotion on costumes. You gotta understand, no one does that. You could RAISE the prices on costumes the week before Halloween and shoppers would accept it. I knew right then they were in trouble.
Further, I’ve been seeing photographs for weeks from all around the country that showed Halloween product being replaced by Christmas product, before Halloween, at all kinds of stores, including Target and Walmart.
The question we really have to ask ourselves is “Is this the canary in the coal mine for the holiday season?” I don’t buy the social media story. I just don’t. I think DIY is cheaper. Simple as that.
I think DIY is cheaper for small children and growing environmentalism means parents are less likely to buy the cheaper disposable costumes. The exposure to cosplay culture turned mainstream via social media. I think that means the older segment will go “big production” or not do costuming at all. At the end of the, day Party City needs to sell things people want to buy, and the low end cheap costumes aren’t cutting it any more.
There is definitely a DIY trend in Halloween costumes and it’s a trend retailers need to jump on. Halloween departments, and even pop-up shops, haven’t changed all that much – packaged plastic masks and scratchy costumes are becoming a thing of the past.
Last year my grandson was a “spider-skeleton” and his three-year old mind knew exactly what he wanted it to look like. This required my daughter to search in a number of places to get what she needed to make his costume. Retailers do a good job with makeup, and a pretty good job with wigs and accessories, but they could do better; adding DIY components, clothing, materials, and even project idea sheets that show how to create various looks. If you want to grow Halloween business you have to go in the same direction as your customers.
Completely agree, “packaged plastic masks and scratchy costumes” are a thing of the past. High prices for poor product that is typically thrown away the next day.
DIY costumes are being blamed for poor sales, but that’s not the real problem. Party City has become irrelevant for Halloween. Pop-up Halloween stores, more effort from Walmart and Target, and of course online have all taken a bite out of sales. Party City is where mom shops with the little kids. Those in the know, and who don’t want to be one of a dozen in the same costume, go elsewhere.
If they saw the DIY trend coming, why didn’t they act? In contrast, children’s brand Primary featured a full-scale sitelet with how-to guides for hundreds of no sew, DIY costumes paired with Primary products, plus a “costume concierge” for DIY help.
“We already have a larger more penetrated costume accessories business than our mainline competitors but we’ve not effectively used it as the competitive weapon that it is.”
This quote says everything to me, which in our language of customer marketing and loyalty, means that they don’t know or have any real relationship with their customers. Which is also why, as Nikki B aptly points out, they ran 20% off POS right BEFORE Halloween.
Classic old-school retail that doesn’t realize that you can’t simply focus on stores, digital and merchandise without including the customer right within that mix.