Retailers start holiday ads early, bet on frugal shoppers

Does it seem like the holidays arrived early this year? Maybe you noticed Costco (COST) stocking up on wrapping paper in September, or holiday television ads blaring during the weeks leading up to Halloween. Well, it's not your imagination, according to TNS Media Intelligence. Retailers this year started their national television holiday ad campaigns as much as four weeks before the traditional start of the holiday season, the media researcher says.

"Typically, retailer advertising is concentrated in the eight weeks before Christmas," said Jon Swallen, senior vice president of research at TNS. "What we saw was a backing up of the calendar by a full four weeks."
But an early start on national holiday advertising isn't the only tool that retailers are using to lure shoppers into their stores. The message retailers are stressing this year? Frugal is in. (AMZN) and Wal-Mart Stores (WMT) have engaged in a book and DVD price war, while Sears (SHLD) is stressing "More Values, More Christmas" (and $15 sweaters) in its ads.

Sears ranks among the retailers that jump-started holiday advertising last month, according to TNS. The retailer boosted its national spending through TV ads by 74%, according to the market researcher. On average, the top department stores -- from Macy's to Walmart -- boosted spending 58% during the period.

Beyond urging consumers into their stores, retailers may be playing a psychological game against last year's dismal holiday sales, says Peter Hempel, president of advertising firm DDB New York. Last year, holiday sales dropped 2.8% from a year earlier.

"All retailers are up against a pretty weak comp from last year, so the minute we have positive comps, it'll hit the news and will create a boost of consumer confidence," Hempel says. "We could have a stronger November than last year, which will boost consumer confidence and we could have a stronger December. It's creating the impression that things are good, which could make things really good."

So is it working? It's unclear, although October retail sales rose about 2%, slightly better than analysts had expected, department stores, for one, still reported lower same-store sales.

Not all companies are sending out a frugal message, however. Yellow Tail wine, the ubiquitous Australian brand beloved by cost-conscious Chardonnay drinkers, says this year it's launching a new holiday campaign that stresses fun, not cost.

"We did consider value, but in the end we didn't think it was the right thing," says Yellow Tail senior brand director Francois Magnant. "We thought it was important to drive affinity and loyalty, so that's why the value message isn't as prominent."

Still, the ad does have a sneaky value message. In a goofy mini-opera, a woman sings about the tragedy of knocking over a bottle of wine. Her partner pulls out two more bottles of Yellow Tail, singing back, "We have more!" Not likely to happen if that bottle was a 1982 Chateau Mouton Rothschild Pauillac with a price tag of $1,400.
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