It’s Christmas Already?!

I have always had a strict rule where you cannot start thinking about Christmas until after Thanksgiving. Likewise you cannot think about Thanksgiving until after Halloween, though I will allow booking the flights. The holidays should be separated out. Especially as Halloween is in the autumn and Christmas is in the winter, we should not start buying Christmas decorations in October. Massive retailers, however, do not see it that way. Each year the date and time for which they begin their holiday sales goes back earlier and earlier.

The day right after Thanksgiving, commonly known in the US as Black Friday, is the unofficial start to the holiday season. This is the day stores begin their Christmas sales and a day that is also known for very aggressive and over packed crowds. This year, however, stores have stated that the big sales will begin November 1st. For example, Amazon is naming November 1st “the official start of the holiday shopping season” and Wal-Mart is introducing “Rollback” prices on “20,000 items”, yet again starting November 1st.

The reason for all of this is competition. Retailers need to keep up with and beat their fellow retailers, otherwise they will lose buyers and demand for their products will decrease. The holiday season in particular is the most important time for retailers to step up their game. It accounts for 20 percent of the retail industry’s annual sales. This year’s holiday season, the National Retail Federation “forecasts a 4.1 percent sales increase to $616.9 billion” from last year.

The increase in price of food, an inelastic good, could also be a factor for the reason behind these massive sales. Consumers are not as likely to buy luxury goods because they have to spend more on inelastic goods. So while many people buy presents during the holiday season they are not as willing to spend large amounts of money, like they may for something as necessary as food. So retailers have to make the consumers feel like they are not spending as much, with discounts and deals. Unless retailers come up with these stellar deals and large discounts, they will not sell or make a profit.

How do retailers make money though, if they have these enormous sales so early on in the season? The answer to that question is magnitude of sales. Firms may be making a smaller than usual margin on the products being sold, but the larger volume of sales causes a large profit that makes the discounts worthwhile. Costumer satisfaction is also a key factor, as if they can find everything they need at Wal-Mart, and are satisfied with the product then they will not need to go to another retailer like Target.

There are many arguments against this tactic, primarily that Thanksgiving was originally a holiday for the family, without too much consumer excess. The same can be said about Christmas. By moving up the start of the holiday season from a consumer standpoint, it seems as if retailers are willing to go after the biggest profit no matter how absurd it seems.

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5 thoughts on “It’s Christmas Already?!

  1. I completely agree with everything you mentioned in this blog. I was watching TV and suddenly a commercial for Christmas appeared and it Halloween wasn’t even over! I was a little confused about the part where there is a projected 4.1 precent increase in sales that transitioned to an increase in the price of food? Did that mean that companies are willing to lower their prices of other goods so consumers can purchase those goods along with food as well?

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    • vezieko says:

      No that meant (from my source) that the overall food prices have gone up, presumably at grocery stores, and so other stores like Amazon whose primary sales are not food have to take that into account. They see that people won’t be as willing to buy more luxury goods because people are already spending more on necessary goods, so need to think of ways to convince people to buy their products.

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  2. This is definitely a very interesting thing to look at. Like you said, it’s crazy how early companies are starting to promote and sell goods for the holiday season when halloween literally just happened. It’s interesting that you bring up the sales that companies and stores are having because yesterday (November 1) I was at a mall and I noticed all of the stores were having “buy one get on 50% off sales.” At the time, I just thought that every store must be having a sale, but looking back on it, it now appears that this is how stores are starting their selling of merchandise for Christmas and other holidays. It’s interesting to see every year just how early stores start selling goods for the holidays.

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  3. johnsona2014 says:

    This is definitely an important topic, as many retailers are now moving up the release dates of holiday goods. From my experience I have always noticed that Costco is ahead of the game in this respect, in that they release their holiday goods first. I think that this can backfire on a business though if they release items too early. If this trend continues, businesses could be releasing goods so early that it will be released in a season where then good has no demand. Eventually this will hurt that business, as the timeliness and instant availability of their product declines.

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  4. jamesel2014 says:

    I think it’s necessary to promote sales early. I remember reading an article explicitly explaining the research behind a consumer’s expectations of sales. That article was money and pinpointed the behaviors of consumer expectation. My mother was so hyped about Black Friday that she budgeted her money just for the sales coming this holiday season.

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