Why Christmas is Coming Early This Year (and What it Means for You)

You're not imagining it: Retailers are already starting their holiday shopping promotions.

×
young females wearing summer clothes on hot sunny day bemused at early christmas shop window display
Alamy
For almost as long as Christmas has been a commercialized holiday, there have been complaints about "Christmas Creep" -- the tendency for retailers to launch holiday sales and advertising earlier and earlier every year.

This year, it seems to be worse than ever. We're already seeing the first commercials for Christmas shopping, and major retailers like Kmart (SHLD), Toys R Us and Walmart (WMT) are eagerly telling us what toys they expect to be top sellers this season. And Christmas is still three months away.

"It does feel like the holidays begin earlier every year," says Alison Kenney Paul, head of the retail practice at Deloitte.

As it turns out, there are a few reasons why Christmas Creep has been taken to new heights this year.

No Presidential Election. Last year, two men stood in the way of the inexorable spread of Christmas: Mitt Romney and Barack Obama. The presidential election served as a bulwark of sorts, holding the public's attention and making it more expensive for retailers to run television ads in October.

This year, retailers have free rein to take over the airwaves in the fall, and you can expect them to take advantage.

"Between paid political advertising and media attention, the election crowded out the ability for retailers to get their message out there earlier," says Paul. "We'll see more advertising and promotions earlier this year."

A Late Black Friday. Every year, Thanksgiving falls on the fourth Thursday of November, with Black Friday coming the next day (well, in theory). But this year, the first of November falls on a Friday, which means that Thanksgiving (Nov 28) and Black Friday (Nov. 29) are as late as they can possibly be.

"It is a shorter season than last year," says Paul. "You do have this phenomenon every few years where there's fewer days between Thanksgiving and Christmas."

Think retailers are really going to wait around until Nov. 29 to roll out their big promotional efforts? Think again. While Black Friday will still be a big deal, its late arrival means that many retailers will place more emphasis on pre-Black Friday deals and promotions.

"I think there will be a first wave of promotions before black Friday," says Jeff Feinberg, a retail industry veteran and a managing director with Alvarez & Marsal Private Equity Services.

A Ridiculously Early Hanukkah. The late Thanksgiving is also intersecting with an unusually early Hanukkah -- in fact, the first night of the Jewish holiday falls on the evening before Thanksgiving, which means Jewish shoppers really cant wait until Black Friday to do their shopping. And by the time Cyber Monday rolls around, the holiday will be more than half over. That's raised the specter of a second Black Friday aimed specifically at Jewish shoppers; we think it's more likely that this will simply be another reason for retailer to roll out promotions earlier in the season.

Still, it's important to remember that only about 2 percent of the American population are Jewish, so this is a minor factor in the grand scheme of things. Paul says that while the early Hannukah gives retailers another platform to talk about the holidays, Jews are generally "too small a group to move the needle." Still, you may see a small effect on promotional activity in regions with heavy Jewish populations. (In some major markets in New York, Florida and California, for example, Jews represent a much higher percentage of shoppers -- one that retailers can't afford to ignore.)

More Focus on Low-Income Shoppers. Walmart officially kicked off the holiday season back in August, when it announced its holiday layaway program. Meanwhile, Kmart aired what seems to be the first official holiday commercial of the season -- an ad for its layaway program.

See a pattern?

These discount retailers aren't doing a good enough job of connecting with the low-income shoppers who are supposed to be their bread-and-butter -- which is why they're offering services like free layaway in hopes of winning them back. And layaway, by its nature, needs to start early. So while some may rage at the absurdity of promoting Christmas shopping in September, keep in mind that these ads aren't necessarily aimed at you -- they're for the paycheck-to-paycheck shoppers who will benefit by putting toys on layaway now so they can pay for Christmas later.

"Economic Headwinds." This has become a favorite phrase of retail executives who struggle to explain why their sales are weak, though Feinberg says that such concerns are somewhat exaggerated.

"We're not in a meltdown; we don't have a flurry of companies shutting down factories," he says. Still, he notes that there's less hiring and stagnated wages, along with general concerns around gas prices and government gridlock. All of these factors have conspired to keep American purse strings relatively tight, and t
hat's going to have skittish retailers eager to get out ahead of the competition -- especially in the wake of relatively light back-to-school sales.

So all signs point toward an earlier shopping season. That's a strategy we're already seeing from Toys R Us, which earlier this month started offering big deals for early shoppers. At the time, we suggested that you take retailers up on the offer if the deals are good and you want to avoid the malls in December.

But the same factors that are pushing retailers toward an earlier holiday shopping season might also dictate caution to the deal-hunting consumer.

"At the first indication that things aren't going well, retailers are not going to wait a week for things to pick up," says Feinberg. "If Black Friday weekend is mediocre, I suspect those first two weeks of December will be huge for the consumer."

As retailers start pushing sales and promotions over the next month, by all means listen to what they have to say. But if they're desperate enough to start running Christmas ads in September, they may also be desperate enough to go discount-crazy in December. Stay tuned.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.


Increase your money and finance knowledge from home

Goal Setting

Want to succeed? Then you need goals!

View Course »

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »