Halloween’s Super Spooktacular X-Border Boom

If sales of Donald Trump and Hillary Clinton masks this Halloween are any indication of the election’s outcome, then Donald Trump is on track to win big.

Demand for Donald Trump paraphernalia has been so great in advance of the holiday that Trump stock at Halloween Express, a Kentucky-based retail chain, has already sold out three times (as of this printing). The company isn’t alone, either, as Clinton and Trump masks together are projected to be the third bestselling costumes this year, according to the National Retail Federation (NRF).

Regardless of the election’s outcome, this voracious demand for Trump and Clinton masks is, perhaps more than anything, an indicator of the growing popularity of the American holiday.

This year alone, over 171 million Americans plan to celebrate Halloween, pushing sales of goods to $8.4 billion — an all-time high, as reported by the NRF. The growing demand for Halloween merchandise is also increasingly benefiting from the holiday’s rising popularity overseas.

For Halloween Express, which operates more than 200 stores in the U.S., international business is on an upward trajectory. Sales in overseas markets, including Australia, Canada, Europe, Mexico, South America and the United Kingdom, are increasing, according to Brad Butler, COO of Halloween Express. Butler recently spoke with PYMNTS about the global demands for Halloween-related products.

As the company’s international business has ramped up over the years, it has seen that growth come from its eCommerce platform and, more recently, third-party marketplaces and freight forwarders.

“We have seen a huge jump in Amazon business,” said Butler, who oversees the company’s eCommerce operations. “A lot of folks who live outside the country will buy on Amazon and ship it to a freight forwarder,” which then handles overseas shipping and duties for international customers.

The company is also experiencing increased demand for Halloween products from resellers and consumers in Japan and other countries, which prefer to use freight forwarders over direct international shipping — a sign of heightened consumer awareness and growing maturity in the market, according to Butler.

International Inefficiencies

For merchants like Halloween Express, supporting international shipping entails having expertise in taxes and duties, handling currency conversion, providing multilingual customer care and, most importantly, combating international fraud, Butler pointed out.

To help evaluate shipping costs, the Halloween Express platform runs a real-time analysis of the products consumers have in their cart — based on the price and size of items, as well as the destination, he explained.

But even with the in-house system, complications remain. Taxes and duties make it challenging to directly ship items, even to Canada, Halloween Express’ top market outside of the U.S., Butler said.

It also hasn’t proven cost-effective to build and support a homegrown international shipping infrastructure for a seasonal business like Halloween, he explained. “If Halloween was year-round, it would be a different story.”

What has been effective is handing off the international shipping component to Globalshopex for the past five years, Butler said. The partnership has enabled Halloween Express to treat international orders like domestic shipments and allowed it to focus its core energy and resources on capturing as much of the October business as it can by “super-serving” the customers.

“It’s just so much easier for us to subcontract out the international component of it,” he said.

Licensing And Shipment Woes

International shipping complications, however, aren’t the only factors making cross-border commerce difficult.

As American movies ride the social media wave and transcend global boundaries, the Halloween business in the U.S. has seen an ever-growing demand for movie character costumes from local and international consumers. This insatiable demand for these costumes presents a unique challenge to sellers in the U.S. — many of whom redistribute to international consumers.

“The problem in the costume industry is too many items that are sold in the United States are really driven by licensing arrangements with major entertainment enterprises, like Warner Bros. and Disney — they own the rights to this stuff,” Butler said.

Every year, those entertainment companies make licensing deals with manufacturers in China, who are asked to make set variations of costumes. Those agreements are then channeled through a handful of distributors in the U.S., limiting the variety and patterns of products available to consumers, Butler explained.

This tightly controlled process can sometimes pose a challenge to the global supply chain of Halloween costumes.

A few seasons ago, costume masks for Davy Jones, a character from “Pirates of the Caribbean,” were all the Halloween rage, Butler said. But Disney wound up dissatisfied with the tentacle-faced character’s costume. “Disney didn’t like how the costume mask looked, and it was too late — they were already in the country, and so, we had to throw that inventory out,” he said.

While it’s a fairly simple process for multinational entertainment companies, like Marvel and Disney, to predict successful costumes and themes for the next year, what’s not so simple is predicting the perennial costume trends for next year’s Halloween season.

“How does one on Nov. 15 or Dec. 15 or Jan. 15 accurately predict what’s going to be a hot seller in October of the following year?” Butler asked.

As Butler reported, meticulous planning goes into developing the looks of perennial costumes — deciding if the witch’s costume needs a bigger hat or a new accessory or if the nurse’s costume should be sexier or family-friendly, among many other things.

As sellers hone the fine details, they only have until March, at the latest, to place orders and receive shipments from China.

But sometimes, new social media trends, like Pokémon GO, can propel demand for new costume styles — often too late to be produced and shipped in time.

“Once Pokémon GO blew up, it was everywhere, and nobody had any costumes because who the hell knew that it was going to happen?” Butler said. “There are some suppliers trying, but the problem is that particular brand is well-known and protected. So, you can’t just go and counterfeit a Pokémon Pikachu costume.”

Going through proper legal channels takes months, which is contributing to a deficit of Pokémon costumes this year, he said.

As the logic goes, with a dearth of (arguably cute) Pokémon costumes this year, there’s a chance it will boost the sales of scary costumes, which could make for a particularly scary Halloween.

And for the makers and sellers of Halloween costumes, keeping up with the international demand for Clinton and Trump masks, on the cusp of the election, may be the most frightening task of the year.

TO DOWNLOAD THE Q3 2016 PYMNTS.COM X-BORDER PAYMENTS OPTIMIZATION INDEX, CLICK THE BUTTON BELOW.

About The Index

This quarter, the PYMNTS X-Border Optimization Index tracks the journey of 192 merchants who are vying for their share of the global eCommerce windfall.

The index takes the pulse on how merchants are improving on attributes conducive to international eCommerce in countries that include Canada, China, France, Germany, Italy, Japan, Mexico, Spain and the United States. The verdict: The U.S. is still ahead of the rest, but not by much.