Christmas creep, explained: Do early holiday sales really help stores?

It's time to think about throwing together a Halloween costume, which means it's also time to start holiday shopping. Kmart and Toys 'R' Us have started their holiday promotions, and Macy's got a jump on Christmas back in September.

The whole phenomenon of Christmas inching earlier into fall is called "Christmas creep." It's practically a tradition by now for consumers to shake their fists at it. But as it turns out, it does help stores, if only by helping them play defense against competitors rather than offense — a sort of capitalistic holiday arms race. Here's a quick rundown of what you need to know about the early holiday shopping season.

So is Christmas actually creeping?

Every year we complain about Christmas being earlier than ever, but the early-autumn (or even midsummer) holiday sale isn't exactly a new thing — retailers have been pushing early sales since the early 20th century, as Paul Collins wrote at Slate last year.

What is new, however, is more intensity around early holiday sales, say retail experts, particularly thanks to an economic crisis that made retailers fight harder for customer dollars.

"I do think the recession put the creep in motion a little bit faster than we'd seen it before then," says Kathy Grannis, spokesperson at the National Retail Federation.

And there is some anecdotal evidence that retailers have grown more aggressive. Kmart ran an early-September holiday ad last year, which AdAge declared the "earliest ever" start to holiday marketing. They did the same thing again this year. And the magazine also reported that Walmart started plugging its Christmas wares in June — a month earlier than last year. Part of the early pushes is layaway — with hard financial times came the need for new ways to help customers pay for gifts, and layaway items can take months to pay for.

One professor says the recession coupled with the growth of online shopping has made for a more aggressive early-holiday-shopping season, not only in length but intensity.

both last year and this year, kmart ran early-september holiday ads

"In order to compete, offline retailers will stay open longer and make the season longer because they have to compete with this omnipresent online shopping — ever since the recession, for sure," says Barbara Kahn, professor of marketing at the Wharton School of Business at the University of Pennsylvania.

It's not just about the date of the first advertisement, she adds — it's also about how many retailers are doing them, how much they're cutting prices, and extending Black Friday backwards into Thanksgiving, which has definitely been a post-recession trend.

Stores already have a strong reason to seek out holiday dollars weeks or even months before Thanksgiving: fully one-fifth of retail revenues come during the holiday season, according to the NRF, dwarfing other big seasons like back to school.

(Source: National Retail Federation)

Does early shopping actually help stores?

It's complicated.

There is evidence, for example, that earlier Thanksgivings — for many people, the official start to the holiday shopping season — actually increase consumers' retail spending. The University of Missouri's Emek Basker found a statistically significant $6.50 per person boost in holiday spending for every day earlier that Thanksgiving falls each year. That means holiday spending is elastic to some degree — even with our set lists of gifts and recipients, we're willing to spend a little bit more, given a little more time.

one scholar found that sales are in fact higher when thanksgiving is earlier, making for a longer shopping season.

It's hard to find a good scholarly answer to how early retailers can go before that boost in sales falls off — Basker says she hasn't encountered any in her research — but Kahn says when all of the retailers have crowded into the fall, they are only competing for a share of the pie.

"Definitely one retailer does it to get an advantage over another, and then one matches, and everyone squares off," says Kahn.

So when everyone has inched early enough — say, into October — there's not a lot more to be gained until someone inches earlier. When Kmart puts up an ad in September, it only might give the store an advantage on snagging layaway customers until Target posts its own September ad (and even then, stores may have to deal with backlash as well, as Kmart did on its Facebook page).

"A self-fulfilling prophecy"

There's one other reason stores might put on big September and October sales, and it can be found in a less obvious place: accounting.

Stores have Christmas sales early this year because they had them early last year and the year before that, explains Professor of Marketing Stephen Hoch, one of Kahn's colleagues at Wharton, in a 2006 article. And that's because they look at holiday shopping by using a figure called "same-store sales," which compare this year's holiday sales with last year's.

So if your local Bloomingdale's holds an October Christmas sale this year and holds it for November next year, that will make its October sales in 2015 look really bad, even if the store on the whole does respectable business during 2015's holiday season.

"If you had a sale last year, you pretty much have to have the same sale again this year to see if you exceeded what you sold last year," he says. "This may be why retailers are putting up Christmas decorations and displays earlier and earlier. They're looking not just at the quarter or month but every week and every day."

Customers hate it less than you think

As it turns out, only a minority of people actively hate early Christmas sales, according to a September Bain & Company survey in the Harvard Business Review and highlighted by the Atlantic earlier this year. The survey found that people in general are indifferent or happy about holiday displays in September.

And there are plenty of people who are OK with shopping early. While the majority (nearly 60 percent) of people start their holiday shopping in November or later, that means there are still around 40 percent who start shopping in October or earlier, the National Retail Federation reports.

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