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BUSINESS OF CHRISTMAS Featured
13 December 2014 Posted by 

BUSINESS OF CHRISTMAS

Jolly scolars consider festive cheer

IT’S beginning to look a lot like Christmas. In fact, it has for quite some time. Did the department stores actually take down last year's decorations?

The present crop, dripping spangles and bursting with baubles, looks eerily familiar. And, as ever, they're positioned like pedestrian hazards so there's no way to miss the message that spending time is here.

And why not? All that money sloshing around is good for everyone. Never mind that online purchases come back to haunt in flashing ads offering related product lines for months to come.

And even if the traditional meaning of the religious holiday gets a little buried in the mounds of wrapping paper, it's still a time for people to come together and treat each other with kindness.

BusinessThink loves Christmas, so much so we've cajoled four of UNSW Business School's lively minds into considering it in terms of their academic disciplines. In doing so, we would like to extend the best compliments of the season to all our readers.

Counting on Santa - Clinton Free

There is no doubt that Santa provides an enormous financial boost to Australia's retail economy. Precise metrics are elusive, but the Commonwealth Bank estimates that Australians spent more than A$18 billion during Christmas last year, an increase of A$2.2 billion from 2012, with Christmas gifts comprising almost half of this figure.

Although retailers in 2014 have been enjoying their best trading since the global financial crisis, there are concerns that Santa's impact this year may be muted.  

The AFGC CHEP Retail Index, which is based on pallet movements as a lead indicator of Australian Bureau of Statistics Retail Trade data, expects retail trade to soften in the lead up to Christmas and various consumer confidence indexes have been largely flat in recent months with ongoing worries about the economy, budget cuts and uncertainty ininternational markets.  

Despite this, retail chiefs throughout the country, endlessly advancing Christmas creep by moving forward the holiday shopping season, remain buoyant about a sales jump  – enjoining all Australians, in Stephen Colbert's words, to spend money they don't have for gifts their loved ones don't want.

Clinton Free is a professor in the school of accounting.

Should you manage like Scrooge? - Will Felps

Let's look at a classic and see what it tells us about the holiday season. In A Christmas Carol, Ebenezer Scrooge undergoes a personal transformation as a result of being visited by the Ghosts of Christmas Past, Present and Yet to Come.  

A casual observer may not think too hard about what Scrooge is changing from and to. But if you look closely at Scrooge's original behaviour, he is not especially cruel. Instead, he is simply pursuing what he sees to be his firm's economic interest – such as maximising productivity and collecting on debts. He does what we so often expect our managers to do.

After the ghostly visits, he realises that he would be happier if he rejected the norms of

market rationality and instead was generous to all his stakeholders (such as, employees and customers).

The message is clear: The holidays are a time to forget about market rationality, and instead be generous. Now whether this is an economically sustainable model year-round is a question the story does not answer.

Will Felps is a senior lecturer in the school of management.

Marketing for an evidence-based Christmas - Jack Cadeaux

Academic research on Christmas buying is surprisingly scarce and reveals some rather unrelated results, some pretty obvious but others less so. Unsurprising are the findings that women are more active Christmas shoppers than men. They shop earlier, shop more,  get more information while shopping and they buy for a wider range of recipients.

Studies show that kids' requests to Santa are almost always for branded rather than generic toys, but that parents like to buy unbranded products as stocking-stuffers.  

Sales analysis shows that monetary gift cards have become one of the top gifts at Christmas, probably because they suit last minute gift-buyers (men), display a bit more personalised judgment than pure cash gifts, are not easily returnable or easily re-gifted, yet are being resold online at significant discounts.

Finally, laboratory experiments show that shoppers are happy when a Christmas scent is accompanied by Christmas music but become unhappy if the same scent is accompanied by non-Christmas music, even if performed by the same artist. So, perhaps a roast turkey-scented gift card that plays Let it Snow when tapped or swiped …

Jack Cadeaux is an associate professor in the school of marketing.

'Tis the season of surplus - Gigi Foster

There are two wondrous things about the holiday season from an economist's perspective.  The first is that we find ourselves with a surplus of speaking opportunities.

Economists get put up as talking heads on all the major channels during November and December, and regale everyone with glorious tales of retail sales.

The second is that surplus, in the true economic sense of the word, is being generated all over the place at a furious pace. It warms the cockles of an economist's heart to see people pursuing their livelihood and their happiness via the market mechanism.  

Having operated in the red for most of the year, many sellers look forward to the holiday shopping season as their opportunity to prove themselves worthy competitors in the marketplace by going into the black.  

For their part, buyers see spread before them a wide and wonderful smorgasbord of products and services (including non-"consumerist" options, such as giving to charities) from which they are encouraged, via the social norm of holiday shopping, to select those choice items that best satisfy their wants and those of their loved ones. Adam Smith would be smiling in his grave.

Gigi Foster is an associate professor in the school of economics.

- See more at: https://www.businessthink.unsw.edu.au/pages/the-business-of-christmas.aspx/?PageNumber=1/?FromDate=1412085600000&PageNumber=1#sthash.nV3QDndj.dpuf



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