FutureWire - futurism and emerging technology

Monday, October 18, 2004

Creative Ways of Forecasting Holiday Sales

It's two weeks until Halloween, but to retailers, it's beginning to look a lot like Christmas. And of course, their greatest concern is determining what their sales will be like this season. To that end, Money magazine is reporting that some Wall Street analysts are devising innovative ways to forecast holiday sales. Amond them:

  • Watching sales of Christmas trees in mom-and-pop lots. The sooner they sell out, the better the season is likely to be.
  • Measuring sales of peripheral holiday items such as wrapping paper and kids' photos with Santa. Again, the more brisk the sales of those items, and the longer the lines for Santa, the better the news for overall holiday sales.
  • Observing sales of corrugated cardboard. Better cardboard sales indicate that manufacturers expect to ship more goods, and that consumers are mailing more packages.

Although these measures are controversial, their practitioners claim to have an excellent track record. With so many variables in today's economy, it's tougher to forecast sales using traditional metrics.

I'm no economist or financial analyst, but here are a couple of measures that might be worth considering as well:

  • The number of new subscribers to Internet services in the weeks preceding Christmas. This might indicate a higher rate of online shopping, or consumers who anticipate getting new computer hardware.
  • The amount and type of garbage left at curbside in November and December. Households that discard furniture and appliances may be making way for new items for the holidays.
  • Business at restaurants. Brisk business may mean that more employers are hosting holiday parties -- always a good measure of yuletide cheer and a healthy economy. If you have to wait longer than usual for a table at your favorite restaurant in December, that's probably a good sign.
  • The amount of holiday decoration that are being sold not only in November and December, but in October. Holiday optimism gets people in the spirit sooner, and they may be planning to decorate right after Halloween.