Christmas Time, Business Time

Happy families, beautifully decorated houses, and delicious dinners. What is on your wishlist this year? With Christmas around the corner, it’s almost the most beautiful time of the year again. Christmas hits are already played everywhere and hopefully the snow will come soon. There is nothing better than a white, shiny Christmas. Everyone is celebrating Christmas their own way. Most people celebrate it with their family, eating a lot of food and of course with a lot of presents. Every year, the biggest holiday in the world causes a major boost for the economy. In this article, we will discuss the impact of Christmas on the economy and whether this is positive or negative.

Christmas in practice

Next to the fact that Christmas is about having a fun time with family and friends, the holiday also brings a gift to all entrepreneurs: the consumer. Everyone wants to buy food and presents to ensure a great Christmas. Christmas time gives the opportunity to many businesses to gain a huge profit in the last month of the year since they can respond to the changes in customer behaviour. Christmas related products arise in the stores already a month before the actual event is even starting.

As a business, responding to the Christmas market can be really simple, for example with introducing new Christmas cards. However, big businesses take it to the next step. Coca-Cola, very known for its Christmas truck, spends a lot on advertising on the holiday every year. The brand managed to create a strong association with Christmas since 1931 (Coca-Cola, 2017). By pushing this association, Coca-Cola managed to generate winter revenues for a product that is mostly associated with warmer periods.  Not a year goes by anymore without thinking about Santa with his bottle of coke. With its ‘taste the feeling’ commercial, Coca-Cola wants to expose everyone’s inner feelings about Christmas: That Christmas is about sharing and having a good time with your close ones.

Christmas is about sharing and having a good time with your close ones.

 Santa’s tips to businesses

A few tips from Santa to let you and your business excel. Maybe will this result in a present from the man himself! (Higgins, 2016)

  1. Santa is painstakingly reliable – Is your business reliable? Be like Santa and do not let your customers down by keeping your promises!
  2. Santa surprises and delights us – Does your business surprise your customers? Try to be creative and delight your customers by being a little bit ‘extra’!
  3. Santa encourages us to write – Do you respond to the needs of your customers? Let the Santa in you arise and give the customer what THEY want!
  4. Santa rewards good behavior – ‘Have you been naughty or nice?’ Reward your customers with a discount.
  5. Santa has elves and  8 reindeer –  ‘It is a team job.’ Do not forget your beloving ‘elves and reindeer’’. Your employees also deserve a reward for good work.
  6. Santa is one-of-a-kind – Santa is special, however, are you unique as well? Look at your business and show that you look just as good as Santa with his big grey beard and velvet red suit!

 

Christmas spending

Almost every country celebrates the worldwide holiday. However, not every person spends the same amount of money on the feast. The figure below shows a few countries and how much these spent on Christmas on average. On top of the list: the United States. In the U.S., Christmas is considered one of the most important times of the year. Not only because they can celebrate this with their family and friends, but also because it generates a lot of revenue for American firms. In total, the amount of money spent in the U.S. on Christmas in 2016 was around 650 billion dollars (Silva, 2016) and an average of 783 dollars per person (Lynch, 2016) (From pounds to dollars).

The average amount of money spend on Christmas in the Netherlands is 150 dollar. For the Netherlands, the main reason for the relatively low expenses is that we celebrate ‘Sinterklaas’ in the beginning of December as well, this holiday is actually a substitute for Santa Claus. For the Dutch people, Sinterklaas is by far the holiday where they spend the most money on for presents. Furthermore, in the Netherlands, the online selling of Christmas gifts and other Christmas related goods produced an extra amount of sales of 207 million euros in three weeks in December 2015 (Nu.nl, 2015). 

For the Netherlands, the main reason for the relatively low expenses is that we celebrate ‘Sinterklaas’ in the beginning of December as well, this holiday is actually a substitute for Santa Claus

Consumers spend 658 million euros between the 6th and the 24th of December in this year. That’s 46 percent more than a normal month. The money is not only spent on presents, food, and decoration.

Businesses mostly give their employees Christmas bonuses to satisfy them or to celebrate a great year of collaboration. Often, employers give a Christmas bonus that can consists of an extra payment or a present.

Businesses mostly give their employees Christmas bonuses to satisfy them or to celebrate a great year of collaboration

 

Influence positive or negative?

It is now clear that that Christmas has a huge influence on the economy and that this season has an influence on customer and business. However, is this a positive influence on the economy or not? The question is, whether the revenues of the holiday exceeds the downfall that occurs in the following two months of the new year (Light, 2016). As Jim Sullivan, chief U.S. economist for research consultancy High Frequency Economics, says, ‘The more someone spends in November and December, the lower the spending in January and February. Every year this question remains. However, it is still expected that the holiday revenues will exceed the fall in the following months.

To conclude,  Christmas is a time with positive results for the businesses and the customer. Businesses can direct their business in such a way to respond to the Christmas needs of the consumer. The spendings on this holiday are very diverse around the world. From around 150 dollars spend in the Netherlands to around 783 dollars in the United States. With the high amount of sales during the Christmas time, it generates a big profit for many businesses. Moreover, the question that remains every year is whether the revenues exceed the fall in sales in January and February. However, Christmas is not about money and expenses. The holiday is to have a great time with your friends and family and to thank them for the beautiful times you have had and will have in the future. Forget yourself, and find time for others. Share the happiness.

Marieke Rijpkema & Jeroen Zuidberg
14-12-2017

References

(2015). Online verkoop bereikt piek in aanloop naar kerst. Retrieved from https://www.nu.nl/ondernemen/4188128/online-verkoop-bereikt-piek-in-aanloop-kerst.html

Coca Cola. (2017). Retrieved from http://www.coca-colacompany.com/holidays

Lynch, A. (2016, December 14th). Here’s what Christmas looks like around the world. Retrieved from https://www.asdagoodliving.co.uk/family/christmas/christmas-traditions-around-the-world

Silva, C. (2016, December 14th) Christmas Spending 2016: How Much Money Do Americans Spend On Gifts? Retrieved from http://www.ibtimes.com/christmas-spending-2016-how-much-money-do-americans-spend-gifts-2460727

Higgins, C. (2016) 6 Marketing Secrets from Santa Claus. Retrieved from https://articles.bplans.com/6-marketing-secrets-from-santa-claus/

Light, L (2016, November 28) Why holiday shopping is so important for the U.S. economy. Retrieved from https://www.cbsnews.com/news/why-holiday-shopping-is-so-important-for-the-economy/