Christmas has come early to Sears and Kmart.
This story first appeared in the July 10, 2009 issue of WWD. Subscribe Today.
The retailers owned by Sears Holdings Corp. decided they don’t need snow, pine-scented trees, deeply discounted merchandise or any other harbingers of the holiday to sell Christmas products in July. Christmas Lane, a pre-holiday program, runs from July 5 to 25 on the Sears Web site and in 372 Sears and Kmart stores.
With consumer spending down in the recession, Hoffman Estates, Ill.-based Sears Holdings is offering shoppers “a jump start” and several financing options, including layaway and zero percent financing,” a spokeswoman said. “This enables them to spread out payments over a certain period of time. They may be able to buy more in the end.”
Below the “Sizzling Summer Sale” on the Sears Web site advertising lawn mowers and garden furniture, an illustration of a quaint row of snow-covered storefronts decorated with wreaths and mistletoe promotes Christmas Lane. There’s holiday decor such as ornaments and a category called winter readiness featuring snow blowers and heated blankets. In addition to items for babies, domestic divas and home decorators, the selection at holiday time will be broader with “different products throughout the store, including apparel.” The Web site offers free shipping for Christmas Lane purchases over $75.
Offering holiday goods early at retail “is certainly a trend,” said Kelly Tackett, senior analyst of soft goods at Retail Forward. “It’s partly hope on the retailers’ part that shoppers will forgo the last-minute shopping [frenzy] that has come to characterize holidays, especially Christmas, and the last-minute bargain hunting. They want to prolong the season to avoid deep markdowns and get incremental sales gains.
“This year, we have seen back-to-school coming out a lot earlier than usual,” Tackett said. “Traditionally, we see b-t-s around July 4, but in early June we saw Target and other retailers bring out some b-t-s items, even before school closed for summer.”
She added, “There’s still going to be a lot of impulse purchases of the hottest, latest items.”
Sears’ strategy could help the retailer more accurately gauge consumer demand for the holiday season. Many stores place Christmas orders in the summer and early fall. With an early read, stores could avoid ordering too much and end up with unsold merchandise. That’s what happened during Christmas 2008, when a sharp drop in spending left retailers holding huge amounts of merchandise they were forced to discount. That led to promotional wars and big dips in profits. Offering holiday goods early “certainly can help with inventory,” Tackett said. “It depends on how many shoppers take the bait.”
Holidays have been arriving earlier and earlier at retail. The phenomenon of retailers moving up the start of the holiday shopping season has been dubbed “Christmas creep.” Typically, Christmas accounts for 25 percent to 40 percent of a retailer’s yearly sales.
“I don’t think [Christmas Lane] is a sign of desperation but another example of Sears’ willingness to try a variety of different strategies and hope that one catches on,” Trackett said.