By Wilfred Sumani, SJ.
The Economics of Christmas
It is a truism that Christmas is one of the most commercialized festivities in the world. A global survey found that, in 2022, households on average spent 156% of their monthly income on Christmas. Common Christmas items include Christmas decorations, food, gifts and experiences. The data platform Statista estimates that Christmas decorations alone will fetch US$8 billion across the globe in 2024, and the figure is projected to hit US$9.6 billion in 2027. Global trends show that consumers spend even more on Christmas gifts. In 2023, for instance, World Remit found that people in the United Kingdom allocated 70% of their Christmas budgets to gifts, while food and decorations received 12% and 19%, respectively. Closer to home, Kenyans channelled 56% of their Christmas budgets to gifts, 21% to food, and 23% to decorations.
How to Cash in on the Christmas Spending Mood
There are many ways in which a business can position itself to create and capture value at Christmas. First, one can create a Christmas edition of an existing product to overtly evoke the spirit of Christmas. An easy way of doing this is packaging – simply stick Christmas messages on your products.
A second possibility is to create complementary products to accompany existing offerings. A bookstore, for example, can print Christmas-themed bookmarks to be offered to customers.
If it is not feasible for your business to create or adapt an existing product to the spirit of Christmas, you can partner with a business whose product lends itself to customisation. For instance, a restaurant can stick Christmas messages on bottled water produced by another company.
In addition to product-based adaptations, one can harness the other 4Ps of the marketing mix (place, people, promotion and price) to drive sales during the festive season. With regard to place, to give an example, a business can open up additional outlets to optimise marketing reach during the season. One of the efficient ways of going about this is to sell your products at popular Christmas events.
Promotion is also a powerful tool for driving sales during Christmas. This may include offering discounts, free product trials, and product bundling. As for ‘people’, it is common practice to enlist the services of a Santa Claus figure to deliver promotional messages redolent of values such as generosity and altruism.
Speaking of altruism, a business can enhance its visibility by engaging in corporate social responsibility (CSR) activities during the festive season. And one can do this with other people’s resources. For instance, you can invite customers to sponsor your outreach to an orphanage.
Carpe Diem
As an entrepreneur, you have to approach Christmas differently from consumers. While your neighbours are planning on what to buy, you focus on what to create and sell at Christmas. The festive season is not the right time for an entrepreneur to close shop and take a holiday, it is time to create and capture value.
