Online e-tailers creep up on Halloween boom
Monday, October 24th 2005, 12:47 pm
By: News On 6
NEW BERLIN, Wis. (AP) _ Jalem Getz used to dislike the lack of seasons in his native California. Now he uses the extreme seasonality of the Halloween business to turn a big profit.
Getz, 33, founded online business Buycostumes.com in a warehouse in the Milwaukee suburbs in 1999 to take advantage of Wisconsin's central U.S. location and cheap rent.
Being an e-tailer also meant not having to open a retail space for just two months of the year, or stock other items. Money saved on storefronts goes to maintaining a stock of 10,000 Halloween items _ 100 times what most retailers carry for the season.
``Our selection sets us apart,'' Getz said. ``A lot of customers are looking for unique. ... And by having that large selection we immediately build that additional goodwill.''
After nearly doubling in size for each of the last two years, Buycostumes.com is now the nation's biggest online seller of costumes, and was ranked this month in Inc. magazine as the 75th-fastest growing U.S. private firm, with revenue of $17.6 million last year and three-year growth of 1,046 percent. Sales this year are expected to hit $25 million to $28 million, Getz said.
Other online Halloween firms are also predicting double-digit growth this year _ compared to a 5 percent gain to a record $3.3 billion for the entire industry, according to a forecast by the National Retail Federation.
``I think it is a good indication that Buycostumes.com has a superior retail model,'' Getz said.
The site sells costumes such as Darth Vader, Raggedy Ann and Cinderella in kids, adult, plus and sometimes pet sizes and the array of capes, swords and masks is mind-boggling. Prices can range from $6.99 for Ozzy Osbourne glasses to a near-original Darth for $798.99.
Celebrate Express Inc., a Kirkland, Wash. online and catalogue retailer, revamped its Costumeexpress.com site this year after a successful test launch last year, and expects Halloween sales to jump more than 35 percent to make up a tenth of its expected $84 million to $87 million in annual sales.
``I think it's the convenience factor and just being able to find what you want,'' said marketing director Katie Manning. ``You don't necessarily have to go to a store and hope that they have the Star Wars costume your child's dying to wear for Halloween in the correct size.''
Even bricks-and-mortar Halloween giant Spencer Gifts LLC _ which opened some 350 temporary Spirit Halloween Superstores in North America, up from about 260 last year _ launched Spirithalloween.com this year to broaden its reach.
Spokesman Mike Champion said the two sales channels have helped feed off each other.
``Many of our guests are using this as a shopping tool and making purchases online, but they're also using this as a browsing tool for their end purchase in a store,'' Champion said.
National Retail Federation spokesman Scott Krugman said a longer spending season, fueled by adults decorating and getting dressed up for parties, was helping companies with an Internet presence.
``There's a bigger promotional window for retailers,'' Krugman said. ``It helps everyone, but it helps the Internet specifically because many times you're dealing with shipping times. You're not getting that instant gratification of purchasing it that day.''
Some consumers are not convinced, however.
Alicia Voeks, a 34-year-old dental hygienist, bought from Buycostumes.com two years ago, but the girl outfit didn't fit and she had to go to a store to buy something different. This year, she was shopping at Halloween Express from a tent set up in the parking lot of State Fair Park in West Allis, Wis.
``Costumes run tiny, and you need to try them on,'' she said.
Shopper Jim Olsen, 51, agreed. ``I've got to be able to hold it and look at it,'' he said.
Buyseasons Inc., the operator of Buycostumes.com, tried to address some of those concerns with a new streaming video channel, Buycostumes.tv, which it launched in August.
It's a cross between the Home Shopping Network and Amazon.com, and shows two self-avowed Wisconsin supermoms interacting with a fashion runway parade of models in oddball costumes from the Flash to Prince Charming. The idea is to show how a costume looks on a real person, Getz said.
John Barker, president of New York-based DZP Marketing Communications, said the site comes across as ``unwittingly camp,'' but accomplished its goal.
``I find it a terrific mix of medium and content to target the gatekeeper customers, who are for the most part the moms who are buying costumes,'' Barker said.
It's not completely original _ QVC Inc. started an online streaming version of its TV shopping program in January 2002 _ but it is the first for a pure-play Internet retailer, said Brad Fallon, author of ``Creating Customers Out of Thin Air: Secrets of Online Marketing for Offline Businesses.''
``I think it's a great idea and a great predictor of things to come,'' Fallon said.
For Getz, the first job is to deal with the rush of orders, and then, come Nov. 1 when hundreds of temporary staff go home, to plan for next year. On the table will be a review of Buycostumes.tv.
He figures that an online competitor will try to copy the idea, like others before it.
``When you're one of the most recognized retailers in a specific category, you will have competitors that copy you and we're very flattered by that,'' Getz said. ``It means we're doing something right.''