The holidays have long been a corporate event. Malls filled with eager gift shoppers browsing department stores such as Macy’s Inc. for perfumes or sweaters and Best Buy Co Inc. for new laptops or smartphones. Porches brimming with stacks of online orders from Amazon.com Inc. or Walmart Inc. stamped with their logos.
But increasingly, retailers not only want to be a place to shop during the holidays, they want to be the gift you give as well.
Food and goods companies have rolled out new merchandise for the holidays, from $25 Panera mac n’ cheese pillows to a $70 McDonald’s branded Crocs. Partially driven by nostalgia and kitsch, corporations are looking to capitalize on any opportunity to align their name with cultural moments that make them more than just a place to grab a cup of soup or late-night McFlurry. They want to be seen as a kind of lifestyle brand.
At a time when industry watchers are bracing for a pullback in consumer spending, food and goods companies are paving a path toward incremental sales that also locks their brand into the public imagination — and elevates their chances of surviving any potential spending dips.
It’s difficult to pinpoint exactly when fast-food chains and big box retailers began jumping into the branded merchandise game. But certainly, in the last few years, the marketing of such merchandise has seemed to increase, leading some products to sell out quickly. For instance, Asian fusion chain restaurant P.F. Chang China Bistro Inc.’s Good Fortune Pen and the three-piece enamel pin set sold out almost as soon as it hit their online site.
After Cincinnati Bengals wide receiver Ja’Marr Chase wore a co-branded $120 7-Eleven x King Ice pendant in October, it quickly sold out, a 7-Eleven spokesperson told me. Target Corp.’s “Barbie Skipper First Job Target Doll,” which comes with a checkout counter, a shopping bag and basket of goods (all with the iconic red and white bullseye logo), is the company’s bestselling Barbie doll. The retailer also has a branded toy shopping cart, which was its third highest-selling toy over this year’s Black Friday week. Walmart can only wish for the cultural cachet to become a kids’ toy.
That cultural cachet, or what the finance world calls “goodwill,” can add up to significant returns. McDonald’s, 7-Eleven and Target declined to disclose how profitable these merchandise lines have been for them. But Kelly Pederson, who leads the retail practice at professional services and accounting firm PwC, told me that selling corny apparel and accessories is like earning a profit on cheap advertising.
Not only does the retailer make $10 off a keychain or $50 off a hoodie, but they also have someone wearing their brand. Retailers who get into the business of branded apparel only need to invest a part of their marketing budget into designing and sourcing knickknacks and pop them on their site. It’s hardly a business that requires millions of dollars or months of consumer research.
Of course, the idea of branded merchandise is not new. National restaurants and fast-food chains such as Hard Rock Cafe and Trader Joe’s have a long history of nestling their way into closets and drawer chests for decades. They managed to build brands that suggested a type of persona and lifestyle more than a place to have a meal or grab groceries.
Wearing a Hard Rock Cafe shirt in the early 2000s meant you were truly rock ‘n’ roll, and if you had one from a restaurant outside the U.S., it also meant you were well-traveled. A canvas tote bag from Trader Joe’s suggests you’re food-conscious and educated but kind of broke. By simply slinging one over your shoulder, you mark yourself as kin to others who recognize the brand because they too are likely overeducated, underpaid and a big fan of Trader Joe’s Everything But The Bagel sesame seasoning blend.
That kind of clout is not a given. Take the fast fashion retailer Forever 21. It had a brief stretch in 2019 of apparel collaborations with colossal household brands PepsiCo’s Flamin’ Hot Cheetos and the U.S. Postal Service that left shoppers feeling confused rather than inspired. Turns out there wasn’t much demand among Forever 21 shoppers for Flamin’ Hot Cheeto crop tops or white hoodies printed with a USPS tracking receipt. A search for “USPS” on the store’s site doesn’t show any available products, and a search for “Cheetos” shows only one T-shirt available for purchase. Even an international brand can’t sell poorly executed wares.
