Are you ready for it?
My children have been planning and plotting their Halloween costumes for weeks. My wife and I ate through the first bag of candy we bought for trick-or-treaters, and had to purchase another. And next year we are buying one of those lawn inflatables to complement our pumpkins.
The National Retail Federation’s annual Halloween Spending Survey shows that Halloween has grown to a $9.1 billion business, with $3.4 billion for costumes, $2.7 billion for candy, and $2.7 billion for decorations. The year-over-year growth rate is 8.3 percent as now 179 million people take part—clearly this is a growth industry, and my dollars are in there somewhere.
I have been reading about how the holiday is celebrated, and with the swarms of data around us, we can have fun looking at regional variations. Per CandyStore.com’s sales records, some states favor candy—Skittles for Florida, Hawaii and New Jersey, and Candy Corn for Alabama, Idaho, Rhode Island and South Carolina. Other states take their sugar in the form of chocolate—Milky Way for Colorado, Maryland and Missouri, or M&Ms for California, North Carolina, Pennsylvania, and Washington, DC. Louisiana stood its ground and is the sole representative for Lemonheads.
Google’s Frightgeist website reports that Wonder Woman is the most searched costume in Abilene, Texas, Great Falls, Montana and Utica, New York while “pirate” is the most searched in Dayton, Ohio, Casper, Wyoming and Tulsa Oklahoma.
What does this mean for FP&A?
Of course there is a huge amount of data available, at various levels of aggregation. So at which level are you forecasting? FP&A needs to balance the ability to obtain, analyze and use this data against the diminishing costs and actions. Do you look at the country as a single market, or are there smaller regional and local markets? Does it make sense to forecast at the country, regional or local level?
Are you monitoring the integrity of the data? Google used search data while CandyStore.com used actual sales. Marketers will say that intent to buy does not equal actual purchases, so one may be more relevant for your business. Google presented data at the city level, whereas CandyStore.com presented at the state level.
Finally, different sources may align to your customer base differently. For example, Walmart shows that the adult Jurassic Part T-Rex Inflatable suit is most popular nationwide and is number one in 43 states.
Are you following the right trends? While store-front sales are suffering this year, the growth of Halloween sales presents an opportunity for retailers. Party City is treating this like the winter holiday season, hiring 25,000 temporary workers and opening 270 pop-up stores.
This Halloween I will be walking the neighborhood, enjoying the decorations and crowded streets. I will also be counting Wonder Woman and T-Rex costumes. And scouring my kids’ bags for Lemonheads, just to see if they are here.
Bryan Lapidus, FP&A, is a contributing consultant and author to the Association for Financial Professionals. Reach him at BLapidus@AllegianceAG.com.For additional insights on FP&A, subscribe to the AFP monthly newsletter, FP&A in Focus.