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Winter 2006 A Booming Business

Funny thing: So many people have happy memories of the “scariest” holiday, Halloween. And that’s one reason Americans spent more than $3 billion on Halloween last year. That level of spending is relatively recent, and rather surprising in some ways. After all, it’s only one day, not a season. It doesn’t have strong religious ties or observances attached to it. It’s a holiday that until maybe 20 years ago was pretty much just for kids. But Halloween’s not just for kids anymore. Increasingly, parties and events augment or replace trick-or-treating. And as the holiday grows, it crosses generational, cultural and even international lines, with more people participating every year. Taken all together, Halloween creates a level of consumer spending on holiday goods second only to Christmas.

From macabre to make-believe

It may be a fun-filled, colorful and commercial holiday now, but Halloween has rather somber roots. It started ages ago with the Celtic festival Samhainn, when ancient Celts celebrated the harvest and their new year on November 1st. That day marked the end of summer and the beginning of the dark, cold winter. On the night before, October 31st, the Celts believed that the boundary between the worlds of the living and dead were blurred, and spirits returned to Earth. The Celts wore costumes for the occasion, told each other’s fortunes, and brought bread and other foods to appease the visiting spirits. Those traditions held for centuries throughout Scotland and the British Isles. Later (around 800 AD), as a way to “de-paganize” these practices, the Catholic Church designated November 1st as All Hallows Day (now known as All Saints’ Day), “hallow” meaning “holy.” And so the day before, October 31st, was known as “All Hallows Eve”—which soon turned into “Halloween.”

By most accounts, Scottish settlers brought their Halloween traditions to the New World, traditions and customs that Americans have since adapted. Today, Halloween is a lively, cheerful, non-religious holiday revelling in pseudo-scary stuff that harkens back to the ancient Celtic beliefs and traditions—skeletons, witches, ghosts, goblins, black cats, tombstones and more—but in a fun, celebratory way. In a modern society that doesn’t believe in werewolves and other mythical beings from the dark side, Halloween presents the perfect opportunity to dress up and turn the one day into a personal ghost tale, horror story, fairy tale or even favorite movie or TV show, replete with costume, props, and even set design. Halloween is also about a day of trick-or-treat, a long-standing tradition that also has its roots in ancient times, mainly the Celtic practice of “guising”—bringing packages of food for the visiting spirits. And in recent years, Halloween is an excuse for parties, for adults as well as kids.

Filling the Void

imageNationally, Halloween sales grew from $2.92 billion in 2002 to $3.12 billion in 2004, a seven percent increase in a just two years. Spending was highest among 25-34 year olds, both with children and without. “Halloween fills an important retail void between back-to-school and the holiday season,” says Tracy Mullin, president and CEO of the National Retail Federation (NRF). “Many retailers are carving out quite a niche for themselves in the Halloween market.”

According to research by Hallmark, the greeting-card company, more than 50 million Americans—roughly 90 percent of families with children to age 12—participate in Halloween. In recent years it’s become a favorite family celebration which includes choosing costumes together, carving pumpkins, trick-or-treating in tandem, giving or going to parties, and visiting haunted houses.

In an Orlando Sentinel article, Mark Chediak quotes seasonal retailer Evelyn Fisher, who operates a Halloween Express franchise store (“Seasonal Stores Haunt Orlando’s Retail Landscape,” 10/18/05). “Customers are eager to take a break from reality and embrace the spirit of trick-or-treat day,” she says. “It’s something to look forward to that’s uplifting and fun,” says a seasonal retailer who notes that adults without kids are getting in on the fun, too. A recent Holiday Shopping survey by Mintel Group International, a Chicago market research firm, shows that nearly three-quarters of households without children under 18 celebrate Halloween, and more than half of those households buy Halloween products. So it should come as no surprise that the nation’s largest Halloween celebration is the annual New York City parade: featuring 50,000 costumed marchers, the parade draws more than two million spectators—most of them adults.

And it’s not just the US anymore. In Great Britain, where it all began, “our” Halloween has an active presence. More than that, American companies increasingly work hard at exporting the holiday to Europe, and they’re succeeding. Halloween festivities are becoming popular on the Continent, and European consumers are beginning to buy Halloween candy, accessories and costumes. According to Business Week, Halloween spending in Germany, France and Italy—the region’s three biggest economies—is expected to top $800 million in 2005, and shows no signs of slowing.

All dressed up

imageIt just isn’t Halloween without costumes. The NRF estimates total costume sales for 2004 at $1.1 billion, with more than 21 million American kids having planned to dress up for Halloween ’04. And it’s not just kids who get excited about costumes: more than half of the 18-to-24- year-olds who participated in Halloween fun wanted to wear costumes, too. “Young adults aren’t willing to relinquish a holiday they grew up enjoying,” says Phil Rist, VP of Strategy for BIGresearch, who conducted the survey. “Halloween remains one of the only days where society gives adults permission to act like kids again.”

The Halloween market is so diverse that it’s hard to pinpoint, let alone predict, the best-sellers in a given year. The top ten costumes in 2004: Spiderman, princess, witch, vampire, monster, SpongeBob, Ninja, athlete (football, baseball, etc.), ghost, and any of the Power Rangers. The hot character outfits for 2005, Chediak writes, include Darth Vader and Napoleon Dynamite. There are hundreds of costume designs on the market ranging in retail price from around $10 for a satin “vampire” cape to $800 for a complete Batman Collector’s Edition costume or $1,000 for a Star Wars storm trooper outfit; and a universe of costumes in between, such as Norman Bates’s “mother” from Psycho: a gray dress (available in men’s sizes, of course) and granny wig. (Also available; a Bates Motel sign with “Vacancy” blinking: great for the front porch.) The options are almost endless, especially when inanimate objects are factored in: the more adventurous can dress as one of countless unexpected things: a slice of pizza, a night stand with lampshade “hat”, a lobster, a rocket, and even some “raunchy” or “adult” items. It seems the only limitation is imagination (and a sense of abandon!).

Costume accessories and make-up complete the outfit, and some are even more fun than the costumes. Must-haves include make-up kits—face paint and glitter in assorted colors, or for specific looks (e.g., the “devil” kit: plastic nose, chin, horns, red and black face paint), bottles of fake blood, and fake teeth—Dracula fangs, black tooth coating, glow-in-the-dark teeth, gold teeth. Classic accessories include hats, tiaras, wigs, wands and masks. For teens and adults, weirdly colored contact lenses are getting popular: green for a reptile look, red for vampires and witches, “blackout” contacts for a “straight out of a horror movie” look.

imageDressing kids in costumes starts early, and baby costumes are huge sellers. They tend to be extremely cute, and if they’re out-of-the-ordinary, all the better. Five of the most adorable costumes for little ones come from the Tom Arma Signature ’05 collection, retailing at around $50. (How adorable? Last year they were “sold out for the season” by Sept. 23rd on one retailer’s Web site.) The line includes a white bunny outfit with huge, floppy pink and white ears, and pink paw prints on the soles; a green-and-orange frog outfit with huge frog feet; and an elephant costume with big, gray floppy ears and a long trunk. All are made from soft, baby-friendly fabrics and come in three pieces (bodysuit with snap closure, headpiece, and slip-on booties) for easy dressing.

For “pet parents” who don’t want to leave Fido and Fluffy out of the fun, there’s a wide and growing selection of costumes for critters. Wholesaler Costume Craze (Lindon, UT) has Halloween togs for dogs and cats. Pooches can be dressed to the canines for trick-or-treating with the kids, or playing the costumed grown-up’s sidekick or “mini-me”—say, Superman and his Super(man) Schnauzer. All of their dog costumes come in a range of sizes. A Shitsu can be Dracula: black satin coat with red lining, oversized collar and gold brooch; a Yellow Lab can go as Snow White, red ribbon headband included. Costumes for cats are less elaborate, probably because fussy felines won’t tolerate anything more than something like the bright orange-and-black jester’s collar.

Clearly, specialty retailers who want a piece of the lucrative costume market, whether for infants, kids, adults or even four-legged friends, have some tough decisions to make. But one way to score, especially for smaller retailers, is to offer unique, good-quality costumes in varieties that mass retailers don’t carry, plus a good selection of add-on props and accessories.

Party time

Costumes aren’t just for trick-or-treating anymore. According to Hallmark research, Halloween has become the number-three reason to throw a party, right behind New Year’s and the Super Bowl. Which helps explain why Halloween is number-two in holiday home décor, according to Hallmark. (Christmas, of course, is number one.) In a recent poll, 78 percent of US families want to spend more time at home and when they do so, many have parties for seasonal events. As Americans stay and entertain at home more, and safety concerns have motivated many parents to find fun ways to replace the kids’ going door-to-door, Halloween has become the perfect occasion for a party.

So whether the event is a big blow-out or just family and friends in for the evening, this seasonal event calls for seasonal décor. But again, it’s not just for kids: in Hallmark’s research, nearly 80 percent of respondents with kids under 18 at home said they enjoy decorating for the holidays—and so do 65 percent of those with no kids under 18 at home. And according to Mintel, they did: The majority of American households decorated inside and out for Halloween 2004, and spent more than $1.5 billion on decorations, up 5.5 percent from 2003. Many Halloween decorations for the home are “copied” from Christmas items—wreaths, garlands, tree ornaments, light strings and more. And the table is set with Halloween plates (paper, plastic, or ceramic) and napkins, fun tableware (forks with real-looking “eyes” in the handle), ghost goblets and tumblers, spider-web place mats, spider candle holder, black and orange tea lights, white “ghost” votive, various centerpieces, cake decorations—the list goes on.

Outside, the front door is the focal point and, as at Christmas, gets a great deal of attention. “After all, it’s where you will have the most visitors this [Halloween] season, and it’s important to set a good first impression of your (possibly haunted) home,” says the Bat Pack, a team of Hallmark decorating experts. Instead of evergreens and red ribbons, Halloween garlands and wreaths feature bare branches, spiders and glowing eyes; instead of red or green tree ornaments, think black or orange with spooky eyes; instead of Santas, some real-looking scarecrows. And strings of lights—not stars or snowmen but ghosts or gargoyles and the like. As with costumes, retailers can offer original or unusual products vs. run-of-the-mill plastic pumpkins, tombstones and ghosts.

And it’s not Halloween without the treats. Halloween has always been the main candy moneymaker for retailers, accounting for 30 percent of seasonal candy sales (followed by Easter, Christmas and Valentine’s Day). Candy sales (all retail outlets) for Halloween/back-to-school were $2 billion, as reported in Mintel’s Sugar Confectionery–US (May 2004), followed by Easter ($1.8 billion), Christmas ($1.5 billion) and Valentine’s Day ($1 billion).

Specialty retailers who want to sell candy for Halloween would be wise to avoid competing with everyone else and focus on unique, perhaps handmade, gourmet Halloween-themed chocolates and other confections from privately owned candy makers and cookie shops. Customers tend to buy these more upscale treats—beautiful pumpkin-shaped chocolates or handcrafted ghost and goblin cookies, for example—not for trick-or-treaters but for their families, or for a Halloween party, or to bring to the office to share with co-workers. One supplier of this type of seasonal treat is Eleni’s Cookies (New York City), who sells Halloween-themed tins filled with gourmet, home-made cookies shaped as pumpkins, ghosts, black cats, half-moons and bats.

Selling Halloween

imageTiming, as any retailer knows, is everything. Start researching product lines early, and order in plenty of time to set up your merchandise several weeks before the big day—early enough to remind and attract customers and keep them coming back as they crystallize their plans and tell their friends about “this great place to buy Halloween things,” but not so early that your display looks or “feels” silly. Some pointers for selling Halloween:

Cross-sell. Offer a wide range of products. Space permitting, try to stock an assortment of costumes, accessories, home and table decorations, specialty treats (chocolates, etc.) cards, candles, and other Halloween-themed items. And remember, many seasonal purchases are impulse buys. Customers might stop by for the ghost goblets they spotted at your cart or store earlier and also buy plates, napkins and candles.

Stock something different. Offer unique, original items that customers can’t find at discount, department or drug stores. They come to specialty retailers to discover something they haven’t seen anywhere else.

Show, don’t tell. If you offer pumpkin-decorating kits complete with cookie cutters, glitter, candles and decorative pins, display a picture of what the finished pumpkin will look like or, better yet, an actual decorated pumpkin. If you sell little kids’ costumes for example, pictures of a couple of cuties wearing them will be more effective than the same outfits on hangers.

Connect to the season. Another way to expand your offerings is to connect Halloween to the “harvest season.” In autumn, consumers look for ways to decorate their homes to reflect the change of season, so you might carry products like wreaths, candles, pillows with a fall theme. Or consider fall fashion accessories: socks, jewelry, handbags, gloves and scarves.

Nice trick

So many possibilities for selling Halloween. Whether you do it big or just devote a small corner to it, you’ll add to the festive spirit of the number-two holiday. And if you start your Halloween homework early, you up the chances of adding to your bottom line.


Kasia Dawidowska

Dawidowska writes frequently for both trade and consumer magazines. She can be reached at .

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