Now that Halloween has passed and the weather has turned, it is safe to say that we have well and truly moved into the Christmas season. The launch of the big Christmas ads will only confirm this feeling. As we begin to turn our attention towards Christmas it is safe to say that many brands have been planning this for months.
For most brands, Christmas offers a massive opportunity and not just for growth. However, for some industries it can also come as a major threat. This is especially true for retailers. A strong performance over the festive season can set them up for a strong year, while poor performance means they could be chasing targets well into the New Year. Understanding how Christmas impacts our clients’ business not only helps them to plan for the best/worst, but also helps our media planners and buyers to best take advantage of the underlying market seasonality.
To add a layer of complexity, Christmas will affect retailers in different ways. Some retailers will see a positive impact from the festive period, while others may see a negative impact. The type of category each retailer operates in will be a key driver of this.
Looking specifically at one retailer in particular we have found Christmas affects their individual categories in different ways. For example, some categories (in this case 1 and 2) begin to build a number of weeks before the week of Christmas, while others don’t begin to see an impact of the big day until 1 or 2 weeks beforehand. Likewise the post-Christmas impact is very different across these categories, with some continuing to experiences uplifts into the New Year, while other see decreases from average sales.
Econometrics allows us to not only measure whether there is a positive or negative impact on our modelled KPIs over specific time periods, but we can also quantify exactly how big or small this impact is. This information becomes especially useful when we overlay the seasonality of media buying costs or compare it against the key seasonal times.
Posted by Kevin Fitzgibbon, Business Science Manager