Christmas in July?

A new Unity Marketing study of the gifting market shows capitalizing on early gift shopping may be the best hedge against consumer uncertainty for holiday 2010

The weather outside is frightfully hot for most of the country, but retailers are hoping the shopping inside is
delightful. While Christmas in July sales have long been an obvious way to inject a marketing event into the summer, this year an increasing number of retailers are jumping on board. Sears, Kmart, Toys ‘R’ Us, Target, QVC, and Shop NBC are all doing Christmas in July promotions, and there is reason to think that this is a smart move in
this economy.

According to Gifting Report 2010: The Ultimate Guide to the Consumer Gift-Giving Market, a new in-depth report on gfting patterns and behavior, two-thirds of all shoppers who give Christmas gifts started their shopping for Christmas 2009 before Thanksgiving. Only one-third started shopping on Black Friday or after.
“Encouraging shoppers to start holiday gift shopping early is going to be especially important this year,” says Pam Danziger, president of Unity Marketing and author of the new report. “The retail environment is really dicey this year with shoppers continuing to express uncertainty about spending.”

Prospects for holiday gift shopping signal challenging retail environment ahead

Danziger points to Unity Marketing’s July 2010 survey among 1,349 affluent consumers — the nation’s ‘heavy lifters’ when it comes to shopping — which finds that they are holding their own spending steady, with feelings about future financial health of the country declining. Nearly half of all affluent consumers (46 percent) expect
their spending to remain constant over the next twelve months, with just 30 percent expecting an increase. Although these numbers are improved over those from the depth of the recession, they have remained flat for two quarters, indicating that affluent consumers are not growing more confident.

“Retailers can’t afford to be over-confident that the shopper is going to come back in a big way this year,” Danziger says. “If affluent consumers are feeling uncertain about the future, then we can be sure that middle-income shoppers are equally or more unsure. For these shoppers, it may well be more palatable to start nibbling at their holiday gift shopping early rather than waiting for closer to the holidays, when financial conditions may be worse.”

“A large majority of shoppers have started their Christmas shopping long before the traditional beginning of the Christmas shopping season. We advise marketers to start their promotion of Chrsitmas gifts early – some 22 percent of shoppers work on their Christmas shopping throughout the year,” Danziger says.

“This doesn’t mean that Christmas trees should show up in stores on Memorial Day; that is off-putting to many and may well drive prospective shoppers from the store. However, fun promotions like ‘Christmas in July’ and ‘Buy One, Stash One’ events will get consumers thinking about Christmas early and shopping all year long,” Danziger
concludes.