5 Ways It's Already Holiday Shopping Season

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WASHINGTON (MainStreet) -- If summer vacationers are convinced they're not in the middle of holiday shopping season, they've been getting too much sun.

While the American consumer has been flirting with melanoma and sitting in bumper-to-bumper traffic boxed in by mobile homes and kayak-toting crossovers, the retail world has been preparing for Halloween, Thanksgiving and the winter holidays. Considering what's on the line, buyers who are already seeing orange-and-black displays at supermarkets or the local CVS (Stock Quote: CVS) and hearing the word "Christmas" bandied about every so often should consider themselves lucky stores have held off this long.

Total retail sales from April through June were up 7.7% from last year, and while much of that stems from a nearly 22% hike in gasoline spending, improvements at apparel stores including The Gap (Stock Quote: GPS) and American Apparel (Stock Quote: APP) (5.8%), general merchandise stores including Target (Stock Quote: TGT) and Kohl's (Stock Quote: KSS) (3.7%) and online outlets such as Amazon (Stock Quote: AMZN) (13.9%) have given retailers some reason for optimism. The recent debt fight and downgrade have eroded that a bit, as the National Association of Retailers predicts flat back-to-school sales for grades K-12 and a decline in college back-to-school spending from an estimated $836 per family last year to $809 this year.

That's a paper clip in a backpack compared with the potential retail windfall that lies ahead. The $19.6 billion market research firm IBISWorld estimates was spent on back-to-school shopping last year eclipsed the $6 billion spent on Halloween, but doesn't come close to the $30.5 billion spent on Thanksgiving and the $135.6 billion Americans parted with during the winter holiday season.

Bookbags and calculators may be at the front of the store now, but in the stockrooms and far corners of department stores, discount stores and health and beauty supply shops, it's beginning to look a lot like Christmas. Don't believe us? According to the retail experts we spoke with, Halloween and the other holidays are already here if you look hard enough. Here are just five examples of how it's already the holiday season in the retail world while the rest of America is still struggling to make it to Labor Day:

The Halloween candy is out.

It's not everywhere yet, but that's how it starts. A convenience store here, a health and beauty supply store there, a little space in the seasonal aisle of a local SuperValu (Stock Quote: SVU) subsidiary later and you're knee deep in "fun sized" Snickers and packs of Smarties seconds after the last Labor Day traveler gets home.

"The advantage for Halloween goods to be out early is that there's so much shopping for back-to-school that some retailers feel like even if they don't buy it now, they'll see it," says Daniel Butler, vice president of retail operations at the National Retail Federation. "They'll remember seeing it at that store and go back and get it."

Retailers and candy companies such as Hershey (Stock Quote: HSY), Tootsie Roll (Stock Quote: TR) and Kraft (Stock Quote: KFT) have good reason to sweeten the pot early. Halloween candy alone is a $1.8 billion industry, according to the NRF. That's almost double what was spent on adult halloween costumes last year, more than double what was spent on children's costumes and nearly $150 million more than Americans spent on Halloween decorations. No amount of sugar and preservatives can give Halloween candy a longer shelf life when supermarkets need the aisle space for Thanksgiving offerings and everyone else is clearing the shelves for candy canes and red-and-green Hershey's Kisses and M&Ms.

"Sales for Halloween drop off immediately the day after Halloween," Butler says. "It's not like Christmas stuff, where you still have some selling in the days after the Christmas holiday."

The Halloween stores are hiring.

If there's an abandoned storefront in your neighborhood, chances are a "now hiring" sign featuring a ghoul or pumpkin now graces its window.

East Coast-based Halloween pop-up giant Spirit Halloween has already begun hiring store staff and plans to release its latest list of store locations later this month. That two-month buffer may seem a bit much to buyers who haven't even taken the kids back to school, but the $2 billion Halloween costumes bring in each year comes with a very finite expiration date.

Besides, why should costume sellers feel bad about promoting their wares a little early when Universal Studios Hollywood announced plans for a Halloween ride based around shock rocker Alice Cooper and Halloween mazes based on the films Hostel and The Thing weeks ago?

"Halloween is one of those holidays for the people who get into that business where they have to sell their stuff before Halloween or they won't sell it," Butler says. "Most retailers probably think an early setup during back-to-school makes sense."

The eLayaway site has an elf on its website.

When your entire business is based around paying now and buying later, Black Friday comes pretty early.

The folks at eLayaway are in the thick of their holiday push and letting customers make installment payments on products and gift cards from partners including Macy's (Stock Quote: M), Dillard's (Stock Quote: DDS), Wal-Mart (Stock Quote: WMT), Sears (Stock Quote: S), Lowe's (Stock Quote: LOW), Saks Fifth Avenue (Stock Quote: SKS) and Staples (Stock Quote: SPLS). By the time those merchants start their Black Friday, Cyber Monday, Green Monday, Free Shipping Day and whatever other made-up consumer holiday sale they introduce this year, eLayaway customers will either already have the products they want or the gift cards they need to cash in on discounts.

"They're buying gift cards so they can take advantage of Black Friday sales and have cash in hand for specific stores like Macy's of Wal-Mart." says Sergio Pinon, founder and chief marketing officer for eLayaway. "They're using layaway to put money aside and aren't committing to a certain item."

Pinon's customers are also using layaway for goods and services the average retailer just can't provide. If a gift recipient is a big Minnesota Vikings or Detroit Red Wings fan, for example, eLayaway's sports branch allows buyers to put season ticket packages costing as much as $20,000 on an installment plan. For those whose holiday wish is a tummy tuck or that set of braces they never got as a kids, eLayaway's medical offerings cover that as well.

"Consumers and merchants have found more creative ways of using a layaway program than we could have ever thought of," he says. "With the expense and difficulty of credit lately, doctors who were offering elective surgery like dental work or hair replacements saw denial rates on credit increase dramatically."

Christmas came, last month.

Target and Toys R Us were among the retailers who broke out the trees, garland and online light displays last month for "Christmas in July" sales. Though some chains including Sears refrained from settling into a similar holiday spirit, Pinon says he's noticed an uptick in Christmas in July participation.

"A lot of retailers, more so now with the Internet, are trying to take advantage of Christmas in July to drum up business," Pinon says. "It's been interesting to watch how a lot of businesses that were doing it in the past use layaway as a crutch to support it or ones that have never considered doing July sales in the past doing it now because layaway can support it."

You'd think that with all of the Christmas in July, consumers would get used to seeing holiday items in a store sometime before Halloween. The NRF's Butler worked in department store management for nearly three decades starting in 1973 and is convinced there will always be shoppers absolutely stunned by what they perceive as holiday creep.

"I ran department stores for 26 years and people always came up to me and said we were setting up for Christmas earlier every year," Butler says. "We weren't, but every year more retailers were setting up as early as the department stores have."

Butler says that even in the early 1970s, department stores began setting up for holiday shopping sometime in September just to have their holiday shops, merchandise, signage and decor ready by November. They would start with a holiday shop full of decorations, trees, ornaments, lights and other seasonal supplies in the back and slowly make their way to the front by stocking the fourth-quarter must-have items.

Though the holiday items are usually a light seller early on, Butler says collectibles -- including Department 56 Christmas village houses, Waterford crystal toasting glasses, Thomas Kinkade signed and numbered holiday paintings and Macy's parade-tied stuffed animals -- tend to fly off the shelves before the first holiday tunes play over the store speakers. Those sales are usually a given, but that inventory still takes quite a bit of time to set up and push out.

"When customers would ask why we set up the store so early, I would ask them how long it takes to decorate their home," says Butler, who helped prepare Macy's, Dillard's and Hecht's stores for holiday shoppers. "If they said 'three days,' I'd tell them that the store is the size of 32 homes."

The really good retailers have already moved on to Super Bowl Sunday and Valentine's Day.

If the sight of boughs of holly in September makes certain consumers queasy, retailers should hand out air sickness bags to shoppers to whom they'll try to sell Super Bowl-sized televisions and Valentine's Day jewelry in a couple of months.

"By the nature of what we do, we're always accelerated and we're always celebrating holidays and events long before," eLayaway's Pinon says. "We'll start pitching Valentine's Day in the next couple of months and start pitching Super Bowl weekend at the start of the football season because there are going to be people who are football fans who want to buy a flat screen to watch the Super Bowl with."

It may seem an odd concept now, but nonwinter holiday layaway used to be a lot more common in the days of the Kmart layaway department. The year-round consumer savings opens up eLayaway to at least one question, though: If Valentine's and Super Bowl plans start soon, when does the winter holiday push begin?

"We kind of hold off until January because that's when shoppers are getting bombarded with their credit card bills, and we remind them that they should maybe start Christmas shopping now for next year," Pinon says. "It's easy to swipe the card at the register, but in January it's like they're being hit with it again."

—For all of the latest goings on in the retail world, visit MainStreet’s “Shopping” topic page for our latest coverage!

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