’Tis the season for retailers to get in the black while delighting holiday shoppers.

Merchandising occurs year round, but the final quarter of the year is when many companies do an extra-concentrated push to conjure a merry mindset. Tapping into visual elements may evoke feelings of joy, but merchandising is also meant to do something practical — drive up sales.

“The goal in any design is to get shoppers to spend more money than they planned to,” Shelley E. Kohan, associate professor of fashion business management at the Fashion Institute of Technology, said in an interview with Retail Dive. 

Shoppers may not consciously identify that product placement and integration, lights and music are making them feel good, but the evidence of those emotions is eventually demonstrated by sales. “We can see it when the purchasing data comes through,” Kohan said.

While the holiday season may be the most important time of year for retailers to focus on its visual themes, merchandising — or the lack thereof — can take a financial toll on companies throughout the year. Nearly two-thirds of retailers lose at least 10% of annual sales due to ineffective promotion or product display execution, according to a recent report Coresight Research conducted for One Door. 

Yet, the holiday season continues to be the pinnacle of complex, delightful and thematic displays, with many retailers starting to plan between six to eight months out. Here are the results of a number of those efforts. 

Macy’s launched and continues the tradition

Illustrator and puppeteer Tony Sarg set the stage for making Macy’s synonymous with the season. Sarg designed and built puppets for shows globally, and went on to create the original Macy’s Thanksgiving Day Parade balloons.

Sarg also created animatronic holiday window displays for the department store — a first for the industry and an element of design the company is still known for today.

This year, the windows are focused on the concept of togetherness, or “how we celebrate the holidays together with loved ones,” according to the company. 

That focus is an important one for Macy’s and a theme found with other retailers’ merchandising programs this holiday, too. After a few years of the pandemic keeping loved ones apart, consumers are looking for gifts and ideas that support values and charitable causes, said Kohan. 

One other way Macy’s is delivering on that idea is through the holiday windows at its Union Square location in San Francisco, which is in partnership with the SF SPCA. Shoppers can adopt cats and dogs that are playing in the windows — a tradition that has helped over 10,000 animals find a home. The organization’s Animal Assisted Therapy Team also brings specially trained therapy animals to the department store to interact with shoppers.

Billy Porter kicks off the season with Bloomingdale’s

Bloomingdale’s, which is celebrating its 150th anniversary, unveiled its holiday window display on Nov. 17 at its 59th Street flagship store in New York City. 

The theme “Best Holiday Ever” translates to windows that contain larger-than-life elements, including wrapping paper, scissors and champagne glasses, as well as a three-dimensional camera feeding images of holiday cards. 

Emmy, Grammy and Tony Award Winner Billy Porter opened the event. “They called me and asked me to sing, and they said I only had to do one Christmas song. Because I thought it was a little early. And they said ‘just one Christmas song,’” Porter said about the event before launching into “This Christmas (Hang All the Mistletoe).” 

“But you know we have to start Christmas early these days. So we are here, for Bloomingdale’s 150th anniversary … personally, I want to thank Bloomingdale’s for the best holiday ever,” Porter said.

Sephora lets packaging do the work

While Sephora has large decorative elements around its store sign in SoHo, other parts of the store are streamlined. The windows, for instance, have decals of ribbons, stars and trees. Inside, pillars are wrapped with similar design elements. 

However, beauty retailers may not have to do heavy lifting when it comes to thematic merchandising because product packaging does it instead. Beauty is a gift set business, said Kohan. That means that packaging is created specifically for the season, and exclusive sets are particularly popular during the holidays. 

“Beauty has a unique product assortment that allows them to do that,” Kohan said.

Saks snags Sir Elton John

This year the Saks holiday window debut got a little help from one of the most famous musicians on the planet. 

The retailer worked with Elton John as part of a partnership to support the Elton John AIDS Foundation’s Rocket Fund. That campaign launched with a Saks light show and window unveiling at the flagship store in New York City on Nov. 22.

The partnership includes the retailer’s $1 million donation to the foundation, a curated merchandise collection, live events and dedicated holiday window displays at the Saks Fifth Avenue flagship. Gucci, who is John’s costume designer for his final tour, has a bespoke window that features archival looks from the brand. 

The light show features a number of John’s songs and goes through Jan. 3.

Is the future of holiday windows virtual? 

While so much of holiday merchandising is based on tactile experiences, it may not always be that way. Integrating a virtual component, or having an in-store display move a customer to an online realm is already taking place.

Last year, Amazon created what the company described as the world’s first smart holiday window. Dubbed “Alexa in a Pear Tree,” the interactive display had elements of motion, sound and lighting and showcased the company’s devices like Alexa, Echo, Fire TV and Kindle. Shoppers were encouraged to ask Alexa to turn on holiday lights, call Santa or play music. 

“A key visual merchandising shift will see retail displays change according to the whims and preferences of the viewer, rather than a ‘one-size-fits-all’ approach,” Jack Bedwani, founder and CEO of marketing agency New Moon, said at the time of the project. 

Window concepts that leverage technology have quickly progressed from there. TalkShopLive launched its first live commerce window shopping experience in late November. Running throughout the holidays, select retail windows in New York City will stream TalkShopLive shows as a way to merge the physical and digital. Customers can shop while watching streamed content by scanning QR codes.

"By launching the first live window-shopping experiences … we are beginning to solve the question every retailer and brand is asking: How do we connect the digital and physical shopping experiences for our customers?” Bryan Moore, TalkShopLive co-founder and CEO, said in a statement.

A switch in merchandising strategy? 

​Whether online or in stores, shoppers may see a shift in merchandising as the days tick off in December. While retailers have put effort into displays in the early part of the season, many of those spaces may switch to highlight store promotions.

That’s because retailers are coming off of a glut of inventory caused by a number of factors, including a pullback in spending on discretionary categories. “Retailers want to push stock off the books by the end of the year,” Kohan said.

That means pushing forward specific products at a time when consumers are looking for discounts.

“Merchandising is very important for retailers, and more important this year than ever,” Kohan said.