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September 23, 2024
Has October Become Holiday’s Make-or-Break Month?
Following news on holiday sales events set for early October arriving from Amazon, Target, and Best Buy, Walmart announced plans last week to roll out holiday deals “weeks earlier than previous years.”
Walmart’s first holiday deals event kicks off over six days from Oct. 8 to 13, with “deep savings” across electronics, home, fashion, and toys both in-store and online, including from Walmart Marketplace assortments.
Last year, Walmart’s holiday season started with solely an online-only sales event over four days from Oct. 9 to 12, with its first in-store “Black Friday Deals” not beginning until Nov. 8.
In a statement, Walmart cited a Bankrate survey showing that 48% of consumers plan to start their holiday shopping before Halloween “as people remain price-conscious and plan ahead to maximize their holiday budgets.”
Bankrate’s survey showed that 12% of holiday shoppers started making holiday purchases by Aug. 31, while 13% planned to start in September, 24% in October, 37% in November, and 15% in December.
“About one in eight early birds have already started and about one in eight are planning to start sometime this month. October in particular, has become the unofficial holiday kickoff,” Ted Rossman, Bankrate senior analyst, told USA Today.
He also said that supply-chain disruption caused by the pandemic drove early shopping in recent years, and many customers have continued those habits. He added, “Some of it’s actually morphed into more of a desire to spread out your cash flow. With high inflation, people are very price conscious, and to the extent that they can spread it out, that’s a good thing.”
Walmart is also bringing back its “inflation-free” traditional Thanksgiving meal that serves up to 10 people at 2021 prices on Oct. 14 versus Nov. 1 last year, becoming the first major chain to announce a Thanksgiving discount. The promotion runs through Christmas.
Latriece Watkins, EVP and chief merchandising officer at Walmart U.S., said, “We’re thrilled to give customers more of what they want this holiday — more time to prepare and more opportunities to save all season long.”
The apparent push toward more holiday deals arriving even earlier in October is partly due to Amazon’s move starting in 2021 to hold a second Prime Day event in October built around holiday deals. Prime Big Deal Days, reserved for Prime members, is being held from Oct. 8 to 9 this year.
Target also recently revealed that its first holiday sales event will run from Oct. 6 to 12 after first moving its holiday start back a week in 2021 to align with Amazon’s Prime event. Best Buy announced that its first Member Exclusive Sale for the holidays will take place from Sept. 27 to 29, while a 48-hour Flash Sale will run from Oct. 8 to 9, similar to last year.
Any shift to earlier October promotions comes as several forecasts have arrived predicting holiday selling’s gains will trail recent years’ levels due to inflation effects, unease over the economy, and higher levels of credit card debt. Deloitte earlier this month predicted holiday growth only between 2.3% and 3.3%, while Bain & Co. forecast a 3% gain.
Comparisons will be challenged with only 26 days between Thanksgiving and Christmas this year, the fewest since 2019 and compared to 32 last year.
Anxiety about the presidential election has also raised concerns over a November slowdown. George Mason University associate professor Mehmet Altug told Axios, “The uncertainty around election results may slow down shopping around that time and that could be one reason why retailers started to offer holiday deals early.”
Discussion Questions
Do you agree that October has become the “unofficial holiday kickoff”?
Should the weaker spending outlook, shorter holiday season, and election anxieties drive earlier holiday sales events?
Should October results dictate the promotional cadence this holiday season?
Poll
Loading …BrainTrust
Dave Wendland
Vice President, Strategic RelationsHamacher Resource Group
Scott Benedict
Founder & CEO, Benedict Enterprises LLC
Jeff Sward
Founding Partner, Merchandising Metrics
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October is a ramp up month for retail – a kind of prelude to the season – but it is not the main event. There is certainly a nice boost from Halloween, and there is some early holiday spending, but most holiday spending still gets made in November and December. You can see this on a numerical basis. October accounts for around 8.4% of annual spend in retail. November is around 9.0% of annual spend. December is around 9.8%. This has shifted around marginally over the past few years and October has become a little more important as people start shopping earlier, but the shift is not dramatic.
What Neil said 🙂
For the last several years October has been the Pre-season for the Holiday Season game. It sets the trend for the remaining Holiday Season. Successful retailers are also leveraging Halloween traffic to convert these visits to Holiday season sales. With a fairly tight economy consumers are balancing the tendency to try and spread their holiday shopping against offers that are perceived as a great deal. Combining all of these variables with retailers getting better at trying and learning from promotions types early in the season with a focus on not ending the holiday season with excess inventory is clearly driving the holiday shopping season into early October.
October is not the most important month in terms of holiday selling, but it’s become critical for holiday messaging. Stores interested in establishing themselves as price or category “headquarters” would be smart to establish a beachhead now.
The questions I have to problem with; the title OTOH is pure clickbait. What should drive the “cadence” is a reasoned plan of what a retailer wishes to accomplish, and how it fits with their long-term strategies (that’s long-hand for “no” to the final question). I know, I know: easier said than done when your less-than-Plan comps make some website’s headline(s).
It may be that October holiday sales are unlikely, at least not to a great extent, with the U.S. economy possibly heading towards a recession, credit card interest rates so high, and consumers struggling with low cash flow, and even living paycheck to paycheck. Db
Any time there are good deals, consumers will spend. However, it’s important retailers still offer great discounts in November and December. I don’t foresee October overtaking those months in spend, but sales will drive impact for sure.
October seasonal sales continue to grow — and it is definitely a significant stage setting time for what will remain the peak for November and December holiday sales. Smart retailers encourage shoppers with eye catching, value-driven seasonal displays in October to invigorate those same consumers and entice them to spend again for for the remaining holidays of the year.
This year is especially important. Given the state of the economy, election uncertainty, and geopolitical issues, consumers are seeking opportunities to lift their spirits and enjoy upcoming family holidays.
Without a doubt, retailers have been successful in “pulling forward” holiday demand into early November and now into October. Doing so provides consumers the opportunity to spread holiday spending across three months, rather than concentrating it all in the 5 weeks prior to Christmas. I also know as a former retail merchant that the week between Christmas and New Years is now a key drive period stemming from the increased use of Gift Cards that are redeemed after the holiday.
As for the reference to a “weaker spending outlook,” I respectfully disagree. The drop in interest rates last week, followed by the potential for additional rate decreases for the end of the year, combined with the strong potential for a Harris/Walz win to increase consumer sentiment, as evidenced by the recent stock market trends as well as the continued soft landing. I think it’s going to be a great season that successfully ends a great year for retail.
Here’s hoping you’re right, Scott.
October is certainly not ‘make-or-break’ for holiday spending, but I think it’s fair to say that it absolutely is the launching pad for holiday. It’s no small thing that both credit card debt and defaults are at record levels. People simply must be more planful and spread out their spending. And October doesn’t set the cadence by any means, but by mid November, rates of sale at the item and category level are solidifying. Competitive pressures are making themselves known. And a retailers own Weeks-of-Supply numbers then dictate the promotional cadence. What are the critical exit dates at the item and category level? When do transitional product categories have to hit the floor? What is the timing for the cheapest and most efficient markdown? Pre thanksgiving? Pre Christmas? Post Christmas? The whole point here is to maximize gross margin $$$ and manage inventories to position the business for 2025. It’s the hardest time of year to manage the business. And not just because it’s the holiday season. It’s the most difficult seasonal transition to manage. The variables for Boston are completely different than the variables for Miami. And then there’s everybody in between.
I am not sure it is a matter of “becoming” as much as “returning” to be the kickoff for the holiday shopping season. In a LinkedIn discussion yesterday that included a couple of Braintrust members, Ted McCaffrey and Paula Rosenblum, there was an astute comment. Natalie C. mentioned that back in the day, Sears – and I would add Montgomery Wards, Radio Shack and other retailers – would start distributing their catalogs in late October to get consumers thinking about holiday purchases.
Kick-off? Yes
Make or break month? Hardley
There are solid arguments to be made that Halloween is the soft opening for the holiday season and has been for a while. Over the years, we’ve watched Black Friday significantly wane in importance and overall holiday success. Part of it, I like to think, is consumers are sick of waking up at 0 Dark 30 on their day off to go wait in line in the cold for some ‘great’ deal on a crock pot or a TV. There’s also the trend of retailers trying to grab wallet share by offering earlier deals, and scooping the competition.
The good news for retailers is that early selling enables them to spot positive and negative trends, allowing them to make adjustments earlier in the season when there’s still time to impact their overall holiday results.
So “Black Friday” used to be the holiday gift kick off. No longer. Now we are moving that into October. Why? Here is my totally unproven, data free, theory: We are moving into a “post consumer” economy pertaining to purchases of anything with the exception of food (we still have to eat!). Since 2008 there have been multiple economic shocks to our retail economy, and these shocks have incrementally put pressure on retailers to drive store visits, revenue and profit up. In that environment what does a chain do? Move the holiday shopping season back further and further in order to generate interest and sales.
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From a holiday messaging perspective, absolutely. There are too many spaces where we’re seeing the kick-off off the Holiday season. Once November hits, we’ve missed the starting point of the most significant time of the year in retail. Even if the bulk of the sales is in November, the messaging needs to start earlier to entice and ignite the customers, and not chase after them.
Yes, October has undeniably become the unofficial holiday kickoff. As the article notes, there’s been a shift in consumer behavior, with shoppers beginning to browse, and even purchase, much earlier than in previous years. Initiated from supply chain disruptions, consumers are now used to maximizing their holiday budgets amid inflation and economic uncertainty.
Retailers that offer early access to deals and deliver personalized recommendations that help consumers spread out their holiday spending will capture demand before the rush while also allowing for more strategic inventory management and smoother operations. This is especially critical with the shorter holiday season. Leveraging AI-powered solutions to tailor early promotions and optimize engagement during this period will be crucial to driving conversions while maintaining profitability.