Dec 25, 2017 at 12:00am ET By Alyssa Walker

Ho ho ho! It’s Christmas. A time for family. Friends. Loved ones. The caroling. The cheer. The elves. The merriment. The food. The tree. The stockings. Santa and his sleigh full of obedient reindeer. The gifts. Oh, the gifts.

As a business student, you probably see the traditions of Christmas—and the business behind it.

Let’s delve deep into the business of Christmas. Ready? Hang onto your elf hat.

1.  It’s not a big market. It’s a huge market.

The US government defense budget is about $600 billion annually. Last year, Forbes predicted that Americans would exceed $1 trillion in Christmas spending. That’s 3.6 percent to 4 percent higher than 2015.  

A September report on CNBC projected holiday spending growth increases by as much as 4.5 percent. E-commerce alone is expected to increase 18-21 percent.

Deloitte predicts that this year’s sales will top $1.04 trillion to $1.05 trillion for the period between November and January.

How? Emotional appeals to purchasing.

Rod Sides, the head of Deloitte’s Retail and Distribution practice said, “Retailers [facing challenges] should modify their assumptions about what drives traffic, engagement and holiday sales growth and realign around customer experience, creating relevant, emotional, and inspirational connections that go beyond just product, price, and assortment.”

2. Christmas is an excellent indicator of market trends.

Shoppers are online now more than ever before. Shoppers are more confident in what they’re ordering, delivery systems, and a comfortable shopping experience.

Consumers are also using technology to help them do their Christmas shopping more than ever before.

The idea of “click and collect,” or “buy online, pick up in store” (BOPUS), is also here to stay. Some stores have even built areas for BOPUS customers to park, run in and collect their purchases, and leave the store quickly.

Another hot trend? Shopping on your mobile phone. Retailers are making their websites more mobile-friendly, and in the process, driving more traffic directly to them.

3.  Christmas creates specialty markets.

Among all the Christmas decorations, the Christmas tree is perhaps the most celebrated—and the most lucrative market.

The Christmas tree business is not an easy one. Last year, The Telegraph interviewed JadeCliff, the third biggest wholesale supplier of Christmas trees in the UK.

Sadie Lynes, Jade Cliff’s managing director said of the favored Christmas tree in the UK, “A 6ft Nordmann fir costs about £50 retail as a premium grade, but people don’t’ understand the amount of work it takes to grow that tree to the perfect state.”

It takes a year—Lynes inspects each of her growing areas across the UK in June and July and returns in August or September to select the trees she wants. She assesses each tree by color, insect damage, needles, and height.

The trees are cut in September, rest for a few days, and then brought to a depot for storage.

It’s no small task and no small business, either.

The same can be said for the multi-million dollar ugly sweater market.

Once considered a seasonal, handmade product that you found under a tree or in a thrift shop bargain bin, the ugly sweater is having a renaissance.

Online retailers gear up for the season now, while big-box stores like Kohl’s, Macy’s, Sears, Penney’s, Target, and Walmart stock ugly sweaters in the fall.

Last year alone brought in close to $5 million at one, small online retailer, Ragstock.

Your takeaway? Don’t be fooled—it’s a time of joy and thanks, and also a time to do some serious business.

 

 

 

 

Alyssa Walker is a freelance writer, educator, and nonprofit consultant. She lives in the White Mountains of New Hampshire with her family.

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