It isn't even Labor Day yet, but retailers are already pulling out the holiday swag. Americans are still looking forward to their last beach weekends, barbecues, or time at the pool, yet in many stores, they're already being bombarded with candy corn and even the suggestion that Mr. Claus is coming sooner than they think.
Retailers want the holidays to come sooner and sooner every year, and for many people, that's downright annoying. However, this behavior, coupled with recent financial results from retailers, illustrates a fear: The upcoming holiday season could very well be a bust.
However, retailers' attempts to accelerate the proceedings may do more harm than good in the attempts to rack up healthy holiday sales.
Holiday spirit takes a beating
Talk about spooky: Halloween candy is materializing on store shelves already. I noticed orange- and black-labeled candy stocked at one local grocery store on July 31. August is way too early, but July? Meanwhile, hints of Christmas cheer are starting to creep onto sales floors as well. It takes some specialness and excitement out of such merchandise when it's showing up in mid-summer.
Big retailers' recent disappointing quarterly tidings probably directly relate to these premature overtures for fall and winter festivity mood setting. After all, some of the majors gave dismal prognostications for the rest of the year. Traditionally, the holiday season is the most beautiful time of the year for retailers, and maybe that's why they're all trying to get a jump on the others.
There are plenty of ominous signals rippling through the retail space. For example, a slew of teen retailers, including Abercrombie & Fitch (NYSE:ANF), Aeropostale (OTC:AROPQ), and American Eagle Outfitters (NYSE:AEO), reported ugly quarters and/or gave poor guidance, sending shares plunging.
Summer vacations and gearing up for back to school didn't go well for many teen retailers, apparently, and that doesn't paint a pretty picture for their holiday outlooks, either. Traditionally, teens like a fresh fall wardrobe when they go back to school.
Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) are major discount players, but both reported quarterly tidings that don't suggest healthy, happy consumers, now or for the rest of 2013. Both Wal-Mart and Target provided downbeat intelligence about their shoppers' current habits.
Such struggling customers are fretting about the costs of basics like food and gas. Such concerns and constraints translate into reasons to slow down discretionary spending -- and of course, that's dangerous for retailers.
The holidays are brewing up to be a knockdown, drag-out fight for dollars amid tight budgets. Consumers in the middle may find this year's match increasingly annoying, since it's beginning already.
It's not just about displays of the Halloween costumes, horns of plenty, or jingle bell assaults in the halls of retail. Many companies are already announcing attempts to coax early responses even beyond simply planting the seeds of holiday panic with merchandise.
For example, Wal-Mart is trying to leverage layaway early. It has already announced that it will no longer charge its customers $5 to use its holiday layaway program, which will launch on Sept. 13.
Toy giant Toys R Us has already vowed that it will match prices from its biggest competitors, which not only include Wal-Mart but also online shopping giant Amazon.com. Wal-Mart has also vowed a price-matching strategy.
Retail's balancing act becomes unbalanced
Some strategies that sound great in theory fail in reality. Bonking consumers over the head by sounding the holiday "shop-shop-shop" alarm could very well backfire. At some point, surely consumers find it far too tiresome and simply tune it out. If they respond, they may even be sick and tired of the holiday rush before it even arrives. How very magical.
For those who are worried about their budgets now -- and according to retailers like Wal-Mart and Target, there are plenty of those consumers -- thinking ahead means saving money, not spending it far in advance of the holidays.
Surely most people like to take one step at a time every year. For example, right now the step is probably to take one last dip in the pool before it closes, or barbecue some burgers and hot dogs. They'll plan pumpkin patches and decking the halls later -- heck, how about when the days are getting much shorter and it actually starts getting cool outside?
Complete and utter fatigue is a very real risk here. Many retailers are playing a difficult game for the remainder of 2013, and so far, the current Holiday Acceleration Strategy could seriously backfire in a precarious climate.