Holiday decorations can have a significant impact on retail spending activity. According to a new report from CBRE, West Coast malls spend an average of $0.27 per square foot on holiday decorations, and Southern California retail owners spent $15.2 million on holiday decorations and events beyond Santa photo centers. These events include tree-lighting events, carolers, simulated sleigh rides, pet photos, crafts, free food and drink, AR scavenger hunts, artificial snow and skating rinks. While the investment sounds significant, it has proven to have a big impact on retail sales volumes.

“In years past, foot traffic at malls would diminish right after the Black Friday rush and then pick up again during the last week before Christmas,” Daniel Hunker, research analyst at CBRE, tells GlobeSt.com. “This year, malls have been reporting steady activity post Black Friday and the sentiment among mall owners is that investing time, money, and creativity into turning these massive centers into experiential destinations can keep revenue flowing throughout the entire month of December.”

It isn't surprising to hear the holiday decorations have such a big impact on retail spending, considering the gravitation toward more experiential retail in general. Shoppers go to malls for a holiday experience. “We are definitely seeing landlords putting more effort into bringing experiential retail along with seasonal decorations into their malls,” adds Hunker. “Putting up decorations and playing Christmas tunes may put shoppers in a festive mood, but it does very little to engage them. Mall owners are starting to see that coming to a mall needs to feel more like an event instead of just another stop to buy presents. Valet, concierge services, and personal assistants take a lot of stress off the consumers' mind, while events such as indoor skating rinks, live music, and fake snow are a great way to keep excitable kids entertained.”

Retailers also have a duty to participate in creating an experience for shoppers. “The onus isn't entirely on mall owners—retail tenants share the responsibility in engaging their customers in a meaningful way when they walk in the door,” says Hunker. “These can be as simple as offering a quick painless checkout process to personalized rewards beyond typical percentage discounts. For instance, some DSW locations began offering free manicures and pedicures with their shoe purchase while mattress retailer Casper is allowing customers to take their products for a test drive with their nap showroom pop-ups.”

While there is certainly a payoff to creating a holiday experience, the exact shopping numbers won't be available until early next year. However, if 2017 is any implication, retail centers and malls with innovative and immersive holiday decorations will see a significant increase in retail spending over centers that did not. “While we won't have exact figures until after the holiday season, 2017 provided us a glimpse of what we can expect at the end of this year,” says Hunker. “SoCal malls invested some $15 million dollars during the final months of 2017—a 59% increase year over year—and made nearly $1.4 billion for the year. From the activity levels we have seen from shoppers this holiday season, I wouldn't be surprised in the slightest, if both income levels and marketing expenses at SoCal malls in 2018 trounced last year.”

In addition to holiday décor, consumer confidence also plays a significant role in driving retail activity during the end-of-year shopping season. “Consumer confidence among SoCal residents has been rising steadily over the last few years, which has resulted in retail sales climbing more than 30% since 2012 and nearly 4% from last year to now,” explains Hunker. “Even millennials, who are often known to be rather spend-thrifts on certain things, are expected to be the biggest spenders on average this holiday season compared with years past. So long as the economy stays strong and wages continue to go up, consumers will likely keep spending their hard- earned money in the retail sector.”

Instant Insights /

Do Holiday Decorations Boost Retail Sales?

Related Stories

Recommended For You