An Extra Scary Halloween

Halloween, coming up this Saturday, is naturally forcing consumers, marketers, and retailers to adapt their approach for the COVID era. How will that impact sales of Halloween-related products? The National Retail Federation predicts overall spending for the holiday will fall 8%, from $8.8 billion in 2019 to $8 billion this year, although those who do celebrate plan to spend 6% more than last year ($92.12 per person). A survey by HalloweenCostumes.com, a division of Fun.com, forecasted that 34.2% of adults would spend less on Halloween this year versus last, 33.7% the same, and just 7.9% more, with 24.3% unsure.

So far, results seem to be mixed, with some regions, retailers, and categories up and others down, and with each marketer taking a different path when it comes to how it is addressing the holiday. Here are some of the takeaways from the season so far:

• Consumers are changing how they celebrate. An NRF survey predicted participation in Halloween overall would be down by 58%, with 75% of consumers saying there would be some sort of impact on their plans. NRF estimated that 44% of households with children would go trick-or-treating (something the CDC has advised against). Other researchers were more optistic, with Piplsay estimating that 50% of consumers would keep up the tradition and the National Confectioners Association finding that 65% would. In NRF’s survey, handing out candy, dressing up, decorating, and carving pumpkins were the top activities planned by respondents. Prosper Insights & Analytics found that fewer consumers than last year would participate in most traditional Halloween activities, with the exception of decorating their home, which 4% more people planned to do.
• Marketers are offering alternatives to Halloween traditions. Target and Walmart are hosting drive-through Halloween experiences in their parking lots, while Lowe’s is offering curbside trick-or-treating. Marketers including Playmobil (with Scooby Doo), Hershey, Kidz Bop, and Mars Wrigley (with Disney) have created alternative content such as activities, music, interactive games, and entertainment distributed via television, streaming sites, or apps. Kidz Bop and Chuck E. Cheese are offering at-home Halloween parties and Sour Patch Kids is delivering “reverse trick-or-treating” packages of candy. Several marketers have created treat maps or risk maps to help consumers navigate the holiday safely. CVS, Meijer, and Target are among the retailers selling “boo bags,” which are bags of candy to leave at friends’ or neighbors’ houses in lieu of trick-or-treating, or in front of their own house for trick-or-treaters to take. Costume shops are open, but without traditional features such as dressing rooms or rental services. Candy brands are tailoring their marketing messages by region, depending on local health risks, often emphasizing treating yourself over handing out candy.
• Retailers’ outlook varies by channel, and by chain. Spirit Halloween opened more pop-ups (1,400) this year than last and has reported positive sales trends to date, while Party City (which has been struggling at Halloween even pre-COVID) decreased its number of pop-ups 90% to just 25 and has predicted lower sales. As of 10 days before Halloween, Fun.com predicted costume sales would be up 10% given season-to-date results. Retailers such as Target, Amazon, and Walmart have been doing well since the pandemic began and are expected to carry that through Halloween, as consumers opt for one-stop shopping at a single location to reduce the time they spend in stores. Independent Halloween costume retailers for the most part have been suffering this season, according to interviews given by owners across the country.
• Consumers seek contactless shopping options. Although Party City’s overall sales have been down of late, its ecommerce results, across buy online/pickup in store (BOPIS), delivery, and curbside pickup, have been strong. Spirit Halloween partnered with Instacart for its same-day delivery services, noting recently that searches on Instacart for the term “Halloween” have been up 650% this year. Online sales of consumer products in general have been growing during the pandemic—up 42% in August and 43% in September versus the previous year, respectively, according to Adobe Analytics—and those trends are likely to hold for Halloween products as well.
• Inventory is a concern amid uncertainty. Candy companies, costume retailers, and other marketers are hedging their bets to prevent post-holiday inventory excesses. For example, candy purveyors are offering less Halloween-themed packaging and smaller variety packs that are appropriate for all seasons (as well as tailored more for home use than trick-or-treating). Costume shops are balancing less-risky generic costumes and accessories that have perennial appeal with pop culture designs that are often more in demand but also apt to be short-lived. Compounding retailers’ inventory concerns, especially for indie shops, is the fact that they did much of their purchasing early in the year, as usual, before they knew the pandemic was coming, meaning many are carrying more stock than is now warranted.
• There will be category winners and losers. Customers seem to be buying children’s costumes and décor items—including giant outdoor pieces—but not as many costumes for older celebrants, who have been a growing demographic in recent years. (Some products are being sold for adults to use during Zoom calls or teens to show off on TikTok.) Candy sales are up during the season, as they have been during the entire pandemic; the National Confectionary Association reports sales up 4.3% across all categories, year-over-year, during COVID and 8.6% during Halloween, while the major players are reporting double-digit seasonal increases. Food gifting is up this year for Halloween—which represents a growing but not a top occasion for this category—as consumers are buying food gifts for others in lieu of traditional parties. Also up: protective cloth masks with designs such as fangs or Jack-o-Lantern smiles, to replace traditional plastic masks, and treat bags with long handles for social distancing.
• It doesn’t seem like a particularly strong year for licensing. Licensors and licensees around the globe are pairing for Halloween-themed products as usual. Examples range from Disney-licensed Crocs as part of a broader Disney Parks Halloween Collection to Sanrio’s pairing with its longtime partner Floresta, a Japanese bakery chain, for seasonal donuts featuring the characters Cinnamoroll and Cappuccino. Overall, however, U.S. retailers and online trackers report more interest in themes such as medical costumes (e.g., nurses and plague doctors), generic ghosts and witches, and costumes inspired by current events and trends, such as Tiger King (not licensed), cans of hard seltzer (some licensed), hazmat suits, the ubiquitous “Karen” meme, and bottles of hand sanitizer. On the licensing side, individual retailers are reporting sales of Fortnite characters, comic book characters including Spider-Man and Batman, and classic horror and supernatural properties, from the Friday the 13th, Nightmare on Elm Street, and Chucky franchises to Harry Potter.
• Experiences are haunted by challenges. As with all live events, Halloween-themed attractions such as haunted houses are suffering from lack of demand due to safety concerns. According to the NRF, only 23% of celebrating families with children and 10% without children plan to visit a haunted house this year. Airbnb canceled its one-night Halloween bookings, which are often used for house parties. Operators of attractions, if open, are reconfiguring for drive-throughs, more outdoor areas, and actors scaring from a distance. On the plus side, many of the attractions that are open have reported fairly strong attendance.

Overall, the season (with less than a week left) can be summarized as down overall, but not as bad as once expected, with some pockets of strong performance. This was a description that could have been used for the Easter selling season—the first significant commercial holiday to arrive during the pandemic—as well. Perhaps the results from these two holidays are a sign of what is to come for Christmas and the other late 2020 celebrations.