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Amazingly, it's time again to deck the halls with festive decor. Fourth-quarter celebrations provide you with ample opportunity to decorate your customers' tables with everything from jack-o-lanterns to turkeys to reindeers.

Still, it's rare that a customer will purchase a complete set of china to decorate their Thanksgiving table once a year, so it's critical that retailers balance their holiday inventory against that of their year-round products, as well as aggressively promote those holiday selections so they're not stuck in their stockings come New Year's Day.

Holiday Fare

The fourth-quarter holiday tabletop market is comprised of winter/seasonal designs, Christmas-oriented fine and casual china, and accessories for the previously mentioned patterns.

Most specialty gourmet retailers focus on stocking accessories with holiday patterns and select dinnerware items expressing color schemes that can work throughout the season. For example, red dinnerware is a great item that holds its own throughout the year and makes a definitive statement during the fourth quarter, as well as for Valentine's Day.

"We do a lot of red dinnerware. It is our biggest tabletop item during the fourth quarter," said Ken Foster, owner of Foster's Gourmet Cookware and Foster's Urban Homeware in Philadelphia. "We mix in items that are decorated specifically for the holidays, whether it's reindeers or Christmas trees."

Halloween is a fast-growing holiday for Foster who has added new dessert plates this year to complement existing orange dinnerware that sells well at the season's commencement.

"We do mostly table runners and novelty candles during Halloween," he explained. "But this year, we've added dessert plates from Waechtersbach. They introduced jack-o-lantern accent plates that go well with their orange dinnerware. Waechtersbach's red dinnerware is the number-one selling pattern during the fourth quarter and also sells well through the rest of the year."

Tony DeMasi, executive director of the National Tabletop and Giftware Association, explained holiday trends: "The market for winter/seasonal designs crosses both fine and casual china, but is mainly in 'good casual' china. The designs are sort-of Christmas, such as cardinals, pine boughs, snowflakes, et cetera. They're popular with families and people who celebrate the 'spirit of the season' as opposed to the particular religious holiday."

For Foster, holiday items that sell well are accent plates, textiles, and giftable items. Aside from these accessory and gift items, Foster focuses on tabletop patterns that perform throughout the season, plus serving pieces that transcend a specific holiday.

"We complement our red dinnerware pattern with dessert plates from TAG, Rosanna, and Design Ideas," Foster continued. "Holiday-specific items tend to be gift sets, such as four to six dessert plates or holiday mugs. We also focus on serving pieces that help in merchandising and make the store look festive. Our customers aren't looking for huge assortments, but they do want to accent their tables with a festive design."

DeMasi believes that while the fine china holiday patterns market is holding its own, no substantial growth exists overall. Consumers seem to be content with buying accessories that complement their everyday patterns. Accessories include salad/dessert plates and cups and saucers/mugs, service pieces, and coffee sets.

"The better the product, the more customers are leaning toward open stock," DeMasi said. "Spode's Christmas Tree is a runaway favorite. It's no wonder the company has this design featured on more than 100 accessories and it has been translated into a Disney line of tableware, too. Waechtersbach is another leader in this area. It too has a huge selection of coordinated accessories."

DeMasi continued, "I'm not seeing or hearing about much activity in Christmas-specific stemware or glassware unless it matches the dishes, although red-trimmed drinkware is selling well across the board all year. But there is new interest in holiday-themed flatware. Patterns with a sprig of holly seem to be the best-sellers."

Taking Stock

Terry Monroe, partner in Murphy's Department Store in Stillwater, Okla., reviews the sales history of previous Christmas patterns before ordering new inventory. His assessment begins in May and continues through the summer months.

"We are a stocking dealer, and our guess at this time of year about what we can sell is crucial to our having a good Christmas tabletop business. As of July, we have ordered a lot of the initial stock for Christmas in china, crystal, and flatware. If the manufacturer has any sort of a summer or pre-season promotion, we will time our purchase of initial stock to coincide with that."

Monroe continued, "We did not run into a lot of great promotions on Christmas patterns this year, but I anticipate we will see some special buying opportunities later in the season, as manufacturers will probably have to make a special effort this year to get sales increases."

Monroe believes his store stocks too many Christmas patterns, but added it's hard to avoid since customers fall in love with one pattern and want to continue building their personal inventory over time.

"They will typically add to it for quite a while - probably longer than they will add to their everyday patterns, so we have to try to have what each customer wants. And, each year, manufacturers come up with a number of new patterns that we try," Monroe explained. "This year, we are bringing in the new Spode Blue Room Christmas, which has the same appeal as their regular Blue Room line and we anticipate customers will accept that look readily. Also, Johnson Brothers has added some new moderate Christmas patterns to their assortment that we are sampling."

Regardless of the size of their stores, specialty retailers must maintain a proper balance between inventory, retail pricing, and consumer demand. While individual stores may have completely different customer bases, hosting a range of moderately priced tabletop selections is important to any store, whether it's a department, specialty gourmet, or high-end home decor store.

Monroe agreed, "Our customer is typically a mid-price customer, and Christmas patterns are usually only used for a month or so each year. Our experience has been that demand for upper prices in Christmas patterns is limited. However, some customers will buy a wide range of pieces in their chosen pattern over a period of several years, so sales volume is good."

Despite the fact that a full set of holiday dinnerware may not walk out your front door anytime soon, holiday patterns are a growing market. Specialty retailers are experiencing growth in a variety of holiday tabletop areas from Halloween to Thanksgiving.

"I think the popularity for such merchandise has grown because people want to get more use out of their holiday tableware since these designs encourage use throughout the calendar season - at least from November through February - and are suitable to families of mixed faiths," DeMasi said. "It's definitely a growing category, evidenced by the increasing numbers of patterns and products and the sales from retailers."

DeMasi also believes that the holiday tabletop category will continue to develop as the economy improves. In addition, he encourages retailers to view their gift registry programs as a way to promote holiday pattern sales.

"I think we're going to see a surge in holiday-themed tableware and giftware business. Wedding gift registrars have told me that couples that 'have everything' before the wedding often register for holiday-specific tableware," he said. "It's also a favorite category for older people who are either starting-over empty-nesters or are finally getting around to buying what they always wanted, as opposed to what they always needed."

Specialty Markets

Apart from dinnerware designed specifically for the holiday season, the focus of tabletop buyers continues to be expanding the department in order to satisfy customers faced with holiday entertaining. The entertainment trend does not translate to holiday patterns as much as it does to high-quality dinnerware and accessories that make a statement. These items may range from limited-edition designer introductions to one-of-a-kind accessories that reflect a certain style.

Foster focuses on basic white serveware for the holidays, with general serving pieces and platters designed with home entertaining in mind selling throughout the season. At Washington, D.C.-based Apartment Zero and Los Angeles-based Fitzsu, the focus is on designer names from companies like iittala, Rosendal, and Alessi.

"Specialty shops are leaning toward patterns or lines that are 'not available everywhere.' These retailers know they won't have to get into price wars over such merchandise nor be fearful that their customers will soon be buying it direct from the manufacturer," DeMasi explained. "Vietri, iittala, Orrefors, and Herend are a few of the companies that are finding success via this line of marketing."

Fitz (Fitzgerald), co-owner of Fitzsu gift/gourmet stores in Los Angeles and Pasedena, Calif., said that while some of his vendors create holiday-specific items, the only holiday-oriented items he stocks are handblown ornaments from Germany.

"What we tend to see from our customers is that they want to do something special, something entirely new. A big client last year bought 26 new of everything for Thanksgiving and it wasn't orange and brown, it was just new, exquisite stuff that had come on the market. That's what we see come the holiday season," Fitz said.

Still, Fitz does review new product introductions with the holidays in mind. It's just that holiday-specific items tend not to be on his shopping list.

"We look at the new items in February in Europe and then we see the stuff hit in the fall. We've made the orders and they are trickling in and hopefully, they will all be there full steam for the holidays," he said. "One of the things that is so great is that we deal with smaller objects and we can get a short turnaround on items we need air freighted to us. So, our stock stays pretty plentiful."

Initial orders average at least 12 deep so that Fitzsu customers can purchase an entire table of product.

"Our customers actually come in and want the latest new thing, which is interesting since some of these lines have short production runs like iittala's Marc Newson glasses," stated Fitz.

Fitzsu also creates holiday groupings of products to give customers easy access to quick gift-giving ideas.

"We do a grouping of products to give people ideas to create their own gift baskets," he explained. "We select items from different manufacturers and put them together. This way, the person who receives it feels as though you spent a little more time on selecting the gift. The Eva Solo Self-Watering Flowerpot is going to be a great holiday item this year. I can see it selling out with a price tag of $29.00 - with anything under $100, you're going to sell a lot. Also, iittala's Essence wineglasses are $12, so you can get a set of six for under $100 and have an incredible gift."

Tim Daly, sales manager at New York City-based Moss, explained that his store has a similar philosophy as Fitzsu. While the store's inventory isn't beholden to holiday-inspired patterns, a section of the store is dedicated to holiday gift ideas each season, the majority of which is tabletop items.

"We do what we think are good gift ideas but are not usually holiday specific," he said. "We create an area that's pre-wrapped gift and stock up on 15 different items that are 90-percent functional kitchenware like salad sets, glassware, and generally functional things."

At Apartment Zero, Christopher Ralston also keeps his eye peeled for product that works throughout the year. Still, his fourth-quarter inventory increases substantially with products that are proven holiday sellers.

"The iittala product line works through the Christmas season, especially the Origo line by Alfredo Haberli. We just introduced the new colors - the red and the blue. The orange flew out of here last holiday season and it was so popular that we have stocked up on it for the coming holiday season," he explained. "During the holidays, we can't forget New Year's Day; this year, we've selected the Essence wine and champagne glasses for the holiday season. The stem is the same length whether for red, white, or champagne, so it really makes for a dynamic setting."

For Apartment Zero customers, the most targeted holiday shopping area is the store's focus on gifts under $50 - a common target price for most specialty retailers.

"Every year, we have a few customers who do an entirely new table, but most people are supplementing what they have with a new serving platter or bowl, so we try to keep the prices below $50," Foster said. "During New Year's, we make sure we have lots of champagne glasses and corkscrews. We also tend to have silver and gold throughout the Christmas holiday and that continues to sell through New Year's, but nothing red or decorated."

Holiday Rush

Creating a festive scene is critical for a successful holiday sales season. Making sure your inventory supports the stage you set cements the sale. When customers walk through your store's door, they need to understand what the celebration is about. While many sell-through home entertainment items may be promoted throughout the season, focusing on specific holiday patterns during each individual selling season is what establishes the mood.

Monroe's customers count on being able to discover new holiday patterns and take them home immediately.

"Christmas tabletop generally is more of a 'take-with' experience for customers than our regular tabletop business. The rest of the year, if we don't have what they want, customers will wait for us to order," Monroe explained. "With specifically Christmas tabletop, if we have it, we can sell it, and if not, we usually lose the sale. Internet customers plan and buy ahead, but many in-store customers buy what they see when they come in."

Foster depends on in-store merchandising for holiday sales. Each month is dedicated to specific holidays, with October focusing on Halloween, November on Thanksgiving, and December targeting Christmas sales.

"It's pretty much all in-store merchandising. We have two different stores and both have fairly elaborate holiday window displays and inside the store, we have a fairly large holiday display and then tabletop displays throughout the store. Both stores are transformed for the holidays," Foster explained. "In our kitchenware store, Thanksgiving is probably our biggest holiday, so we devote the entire store to turkey-related product. And on Black Friday, the store turns to Christmas."

Monroe begins his holiday promotions as early as August with a preview display of basic pieces to pique customers' interest in the upcoming holiday season.

"We also put a Christmas china set of pages on our Web site in early fall as soon as we know the promotional prices and have images available. Then, we run sales on the various Christmas patterns at different times throughout the fall and display a wider selection of those patterns being promoted in October, November, and December. Once we get to the end of November, we are usually too busy to change displays, so we put just as much out as we can and tend to run one comprehensive Christmas china sale during the last three weeks before Christmas."

Murphy's Department Store also relies heavily on newspaper advertising, using full color or spot color in their newspaper ads. Limited television advertising is also used to promote the store's holiday inventory with pricing established at the manufacturer's lowest suggested retail if they have specified one, or discounted to be competitive within the market area.

Holiday Hangover

When the last presents have been opened and your customers are toasting the New Year, look around your store for the leftover holiday inventory. It's time to celebrate if you've got nothing leftover screaming Saint Nick on your shelves, and some cheerful smiles if there are only a few items remaining.

The first impulse is to sell out those items at discounted prices, but there are alternatives to this knee-jerk reaction. First, you should consider whether some of those items would translate into other events. Warm shades of orange and greens may be used for springtime displays when paired with other products. Romantic reds are just pining for a Valentine's Day spread, while silvers and golds make great anniversary celebration displays.

At Murphy's, leftover patterns are traditionally holiday-specific items. The store normally holds any leftover inventory for the following year or slates discontinued patterns for a special summertime clearance.

"We do not do a lot of specifically fall pattern buying. We just put out those patterns that work well during the fall and order for customers as needed," Monroe said. "Sell-through of remaining stock is difficult, as generally our customers are not responsive to seasonal offerings outside the season, no matter how low the pricing. We do try particularly during our clearance sales, but sometimes we just have to wait for the next Christmas selling season and price the things we need to get rid of at 50 to 90 percent off. We always try to get rid of items and patterns which are discontinued as soon as possible, as we do not want to be in the discontinued china business."

One clearance promotion Murphy's holds annually is its Krazy Days. Held each summer, the sale enables the store to get rid of buying mistakes made over the previous six to 12 months.

"Our sales were up four to five percent this year in spite of the very hot weather, so the event was a success," Monroe explained. "We included some individual discontinued Spode Christmas Tree and Johnson Brothers' Victorian Christmas items in the sale."

Another benefit of focusing your attention on entertaining items that sell through the season is that any end-of-season sale will be limited. At Foster's stores, the buying pattern of holding holiday-specific items to a minimum while still increasing tabletop inventory to reflect the needs of the season pays off.

"I would say that fourth quarter is 30 percent of our tabletop business. Our inventory probably goes up 40 percent with a 20-percent increase in tabletop items," Foster said. "We have a holiday sale at the end of the year with 50 percent off, but we tend not to have much holiday-specific inventory remaining. Overall, this is the best time of year for tabletop sales."