New York’s storied holiday window displays elicit “oohs” and “aahs” from both adults and children alike. But are these exceedingly elaborate displays worth the effort from retailers?
The city's department stores have tried to one-up each other throughout the years with holiday window displays that feature live animals, real ice, and lots of digital tricks. This year’s displays from Macy’s, Bergdorf Goodman, Barneys, Saks, and Bloomingdales include unveiling ceremonies peppered with celebrities, partnerships with both luxury brands and renowned artists, plenty of fake snow and ice, and 7 million Swarovski crystals.
One might wonder why department stores invest so heavily in these displays, especially as e-commerce continues to grow in importance. This year’s Cyber Monday was the biggest online sales day ever, while digital sales on Black Friday topped in-store sales for the first time.
But despite the trends, retailers are still spending on these extravagant displays.
The history of window displays: Building loyalty for generations
Since R.H. Macy unveiled his first holiday window displays in 1874, New York city department stores have competed to create the most elaborate displays in their windows—a “gift to the city,” as many see them, according to Ad Age.
The windows have only gotten more elaborate in recent years with the introduction of technology such as light shows and digital displays, becoming a tourist destination in their own right. Lord & Taylor estimates that 500,000 people pass by its windows daily, while Macy’s visitors-per-hour to its windows rises from 10,000 on a typical day to 15,000 during the holiday season. The displays have become a tradition for retailers and loyal shoppers alike.
“A lot of these stores do have loyal customers,” Oliver Chen, a managing director at the financial services firm Cowen and Company, told Retail Dive. “It’s a mixture of older and younger customers [viewing the windows], so you have to maintain loyalty of the older customer base and pick up millennials.”
The holiday season brings in about 25% of annual sales for retailers, according to research from NPD, while windows displays influence purchasing decisions 24% of the time on average. Given that 93% of sales are still made in-store, window displays have the power to attract more customers to stores — even if it is just to their windows — the all-important holiday shopping season.
Department stores have had an especially hard time leading up to the holiday season this year, with many reporting disappointing earnings last quarter. Window displays, and the loyalty they engender, could help.
In an effort to bring a passersby into their stores, retailers are selling branded merchandise in-stores and online that's tied to their window displays. Bergdorf Goodman, which partnered with Swarovski to create its crystalline “Brilliant Holiday” displays, boasts multiple limited-edition stone-lined pieces in its holiday catalog, including an embroidered evening gown, clutches, and jumpsuit. Bloomingdale’s will sell books by florist Jeff Leatham, who engineered flowered sculptures for the department store’s displays, as well as his candles and crystal designs. Lord & Taylor will sell gingerbread and sweets, a nod to the lavish gingerbread house festooned in one of its windows.
While Retail Dive was unable to get comment from department stores on exactly how much these displays cost, it's clear that retailers feel they are well worth the money spent.
“I absolutely do, 100 percent,” Dennis Freedman, creative director at Barneys, told the New York Times when asked if he thinks these holiday windows draw in sales. “The reason you come in — you either go to our competition or you go here — is because it feels right. You walk in here and you relate to it.”
The importance of being different
Today, retailers are trying to use holiday windows to differentiate themselves in a crowded retail market — a necessity that has become increasingly important as foot traffic at department stores falls and the availability of products online grows.
“They really need to give customers a stronger reason to shop there and they have to be more branded because it’s easy to get product everywhere,” Chen said.
These stores can differentiate themselves through unique experiences like extravagant window displays. This year, Barneys created giant refrigerated windows, where sculptors carve ice penguins while the crowd outside watches. Saks, in a partnership with MasterCard, supplemented its first Winter Palace light show with fireworks and a 200-member chorus. Elaborate unveilings, which in the past have included celebrity performances and appearances from The Rockettes, are now the norm, and a good way to extract as much marketing material as possible from the displays.
“There’s a commercial element that makes it a viable way to spend our marketing dollars, for sure,” Marc Metrick, Saks Fifth Avenue’s president, told the New York Times.
Most importantly, retailers are leveraging the windows to remind customers of the joys of shopping in stores.
"It is, at its best, experiential, and isn't that what we're all talking about?" Jean McLaren, president of marketing firm Marc USA, told Ad Week. "We're all trying to build an experience that reinforces the brand in some way and that builds that sense of loyalty. That's what [holiday] windows did years ago, they built up all this warm feeling about this brand and it became an experience to take your family to see."