Please ensure Javascript is enabled for purposes of website accessibility

Think the Holiday Season Is Over? Think Again.

By Rich Duprey - Jan 6, 2016 at 5:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Retailers may yet figure out how to extend the Christmas momentum into the new year.

You can almost hear the collective sigh of relief from weary spenders once the Christmas holiday comes to a close and the hustle of the shopping season ends, but retailers are looking at another holiday opportunity to extend the sales momentum into the new year.

Many devout Christians celebrate the Epiphany, the feast day commemorating the arrival of the magi, or the three wise men, at the manger in which Jesus was born (some cultures celebrate it as the day he was baptized in the Jordan River by John the Baptist). While it is an important holiday in the religion, particularly among Roman Catholics, the growing U.S. Hispanic population may propel its observance into a fresh chance for retailers to generate new sales in this country.

A recent blog post on Target's (TGT -0.26%) website hinted at what may be in store for consumers. Highlighting a Latino family's YouTube reality channel called Realitychangers, the retailer underscored the importance of the Epiphany, or Three Kings Day (El Dia de los Reyes) as it's referred to in Hispanic culture, to the Spanish community. Target transitioned the discussion from the holiday itself -- which is celebrated each year on Jan. 6 -- to choosing gifts to buy for it, asking the family what was on "their Three Kings Day wish list this year." Naturally it was toys that Target sells, like Twister and Candy Land, along with video games like Minecraft for Xbox.

The Hispanic population has been on the rise in the U.S., growing at an annual 4% compounded rate since 1970, and hitting 55.4 million in 2014, some 17% of the total population. That makes them the largest minority group in the country.

Mexicans comprise the vast majority of the U.S. Hispanic community, or 64%, according to Pew Research, and Puerto Ricans are second at just under 10%. The Three Kings holiday is especially celebrated among those two communities, where it's considered as important as Christmas, and retailers have taken notice.

Wal-Mart (WMT 0.80%), for example, has been promoting Three Kings Day for several years, setting up displays and even arranging tours of hundreds of stores by people dressed up as the magi.

"Walmart is committed to serving its customers' needs and the Hispanic community by recognizing Hispanic holidays such as Three Kings Day with traditional foods, customs and products," a Wal-Mart executive said back in 2008, also noting that giving toys was a popular component of the tradition.

As part of the tradition, children place grass and water in a box under their beds for the magi and their camels and in return receive a gift.

Tapping into the Hispanic culture's celebration of the Three Kings Day holiday could be a way for retailers to extend the Christmas sales season. Image: Fixing a headdress at a Three Kings Day Parade in Brooklyn. Image source: Timothy Krause.

That makes the holiday tailor-made for retailers looking to spur more sales, like Target, Wal-Mart, and Sears Holdings (SHLDQ), whose Kmart division sponsored an appearance by Puerto Rican musician Jose Feliciano a few years back to tie into it.

Retailers have been trying to figure out for years how to tap into the Hispanic market. Sears offered a line of apparel named for the "Latina Martha Stewart," Lucy Pereda; Kmart had a line of home goods from Mexican soap opera and pop star Thalia Sodi; Kohl's (KSS 1.76%) launched a clothing line featuring TV personality Daisy Fuentes, Macy's (M 0.96%) and Nordstrom (JWN -0.55%) sold a popular line of women's shoes designed by legendary guitarist Carlos Santana; and J.C. Penney (JCPN.Q) spiced up its clothing lines with a Latin flavor called Candela.

Year-over-year growth in the Hispanic population is slowing, rising just 2.2% between 2010 and 2014, and lower than the 3.4% increase between 2005 and 2010, but their purchasing power continues growing, jumping 45% over the past five years and hitting an estimated $1.38 trillion.  

Reaching into that increasingly deep pocket by glomming onto the Three Kings holiday may be one effective way for retailers to spur sales in a period that's been historically slow. It could also mean the holidays are one step closer to becoming a year-round event.

Rich Duprey owns shares of J.C. Penney Company. The Motley Fool recommends Nordstrom. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$126.58 (0.80%) $1.01
Target Corporation Stock Quote
Target Corporation
$166.13 (-0.26%) $0.43
Macy's, Inc. Stock Quote
Macy's, Inc.
$17.84 (0.96%) $0.17
Sears Holdings Corporation Stock Quote
Sears Holdings Corporation
Kohl's Corporation Stock Quote
Kohl's Corporation
$30.55 (1.76%) $0.53
J. C. Penney Company, Inc. Stock Quote
J. C. Penney Company, Inc.
Nordstrom, Inc. Stock Quote
Nordstrom, Inc.
$23.51 (-0.55%) $0.13

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.