CHRISTMAS COMES BUT ONCE A YEAR AND IT’S JUST ONE DAY. BUT HOW DO BUSINESSES COPE WHEN THEIR BUSINESS IS CHRISTMAS? HOW DO YOU SUCCEED WHEN YOU’RE ALL ABOUT A SEASONAL CELEBRATION AND NOTHING ELSE?
For 2017, holiday retail sales in the United States are forecast to amount to a staggering US$680.4bn. This seasonal sales surge is so large that for 2016, American retailers employed an extra 570,000 people, meaning big business for the recruitment industry.
Nothing says Christmas more than Christmas trees. The retail value of the 2016 Christmas tree market in the US was an eye watering US$2.04bn, up from US$1.32bn in 2015 – a whopping 54.55% increase. It is a lucrative seasonal industry, of course, but where’s the opportunity? A Christmas tree is a Christmas tree and the market is flooded.
That’s not how two enterprising SME leaders saw it, as they spotted a gap for a new company. In 2006, noticing that artificial trees don’t much resemble the real thing, Balsam Hill founder Thomas ‘Mac’ Harman sensed a market for high-end artificial trees. Armed with a business plan and 16 designs based on actual trees like the Norwegian Spruce, a Chinese manufacturer was found and a pop-up stall launched. Mac’s hunch was accurate and he grossed US$3m in his first year of trade. Fast-forward ten years: some trees retail for upwards of $2k and the company’s 2016 revenue hit US$115m. Mac now employs 160 staff and production lines have been diversified to include tree ornaments, wreaths and a year-round line of fake floral arrangements.
But what about opportunities in the genuine tree market? Enter Christmas Tree Brooklyn. Founded in 2012, they’ve experienced year-on-year growth with a very simple premise: move the Christmas tree-buying model into the 21st century. Using an Uber-like digital access model, customers can order online or by telephone and get a Christmas tree delivered and set up anywhere in Brooklyn, almost instantly and up to 50% cheaper than the competition. Their business model is a resounding success.
By combining the benefits of being a highly localized small-to-medium enterprise with a 21st century business model, they’re leveraging proximity marketing. They do one thing – get Christmas trees to consumers and businesses – and they do it in one location, Brooklyn.
Seasonality has been built in to their business model. Come Christmas, a tree is the first thing many think of. Christmas Tree Brooklyn provides a simple shortcut to the first thing on buyer's minds at the right time. They’ve made themselves integral and indispensable to many people’s Christmas. Many businesses would see the small festive business window as a limitation to setting up a new business, but in selling Christmas trees, they are successfully bringing a sense of urgency to both buying and selling.
They are dedicated to doing one thing exceptionally well. Customers receive exactly the service they expect every time, guaranteeing a high returning customer rate year-on-year. With numerous cross-sells, from bases, lights and specialized tree food to having someone dispose of your tree, they’ve cornered a lucrative part of the Christmas tree market.
The six-week long Winter Wonderland held in London’s Hyde Park had more than 2.5 million guests attending between 21 November 2014 and 4 January 2015. This was an increase of 25% from the previous year. Winter Wonderland has proved to be very popular. So much so that its production company, PWR Events, was acquired by IMG in Summer 2015, making a seasonal production just one activity for a global leader in sports, events, media and fashion operating in more than 30 countries. This means that IMG now has a successful seasonal business that’s one of many businesses, benefiting from economies of scale. Smart move.
Back to the opening question: how do you cope when you’re all about a seasonal celebration and nothing else? We can conclude that all three given examples have common denominators: all saw a gap in the market that they capitalized on and all have a clear focus on doing one thing to the very best of their abilities.
As a result, all three experience year-on-year growth, by offering an exceptional service. In the case of Winter Wonderland, their model and business has been so successful, they were acquired by a company with a global presence.
In all three cases, being seasonal has been no barrier to success – in fact, focusing on seasonality has been the key USP. Could you make it yours?