As a career-long photographer who happens to have an ample white beard, Mike Spiegel—sorry, make that Santa Mike Spiegel—can tell you all about the economics of the man in the red velvet suit. Several years ago, Spiegel was booked to appear as Santa at the visitors' center of Pez candy headquarters in Orange, Conn., and he's watched the gig grow ever since.
"The first year there was a good crowd. The second year the crowd tripled and then the next year it almost doubled again," Spiegel said. "People want that photo every year—and they're going to go out of their way to get it."
Santa Mike is referring, of course, to a holiday stalwart: the photo of the kids sitting on Santa's lap. Chances are, we've all either taken one—or been in one ourselves. But behind the jolly-good fun lurks a question pertinent to all retailers at a time of year when some 19 percent of sales ring in: Does the guy in the Santa suit merely entertain customers, or does he actually draw them in the door?
By most accounts, he does both. "In terms of driving more traffic? Absolutely," said Jesse Tron, spokesperson for the International Council of Shopping Centers. In fact, the ICSC's recently released consumer forecast for the 2015 holiday shopping season found that 50 percent of parents with kids aged 13 or younger plan to make a trip to a shopping center for the express purpose of visiting Santa Claus.
Retail Santas are nothing new, of course. Department stores discovered that having a Santa on hand was good for business shortly after the Civil War. But booking Santa has since turned into a very big business in the U.S. In addition to there being any number of "professional" Santa organizations throughout the country, many retailers contract with huge talent firms to book Santas in their stores. A company called Noerr Programs supplies Santas to some 200 regional shopping centers, and another firm called Worldwide Photography signs Santas to multiyear contracts.
And while some malls cut their Santa bookings in the years following the recession, the franchise seems healthier than ever—and Santa's power to draw crowds is doubtless one of the reasons. To be clear, however, the motivation isn't so much kids who want to sit on a stranger's lap as it is parents hell-bent on getting a photo of it.
"When you see a shopping center where they have a photo operation set up, most certainly it does draw people to it," said Santa Bob Elkin, president and CEO of the International Brotherhood of Real Bearded Santas, whose membership numbers 1,200. Elkin has observed that parents with small children will go so far as to comparison shop for Santas, choosing the mall or retail store with the most realistic Santa, and going there. He's also seen generational loyalty to favored Santas. "Some Santas have been at the same shopping center for 10, 15 or 20 years," Elkin said. "People who came as kids now bring their own kids."
Malls are aware of this dynamic and have upped their game accordingly. Indeed, having an attractive Santa concession today seems to have more to do with a high-tech Santa's Village than old St. Nick himself.
This year, mall operator Macerich will partner with HGTV to install "Santa HQ" at its 10 properties nationally. This "completely reimagined visit with Santa for the 21st century" will give patrons a chance to take an "Elfie Selfie," try the "Naughty O' Nice Meter" and visit Santa's observatory by using "Elf-Ray Vision." (There's a chance to actually meet Santa, too.) General Growth Properties, which operates 131 malls across America, has partnered with DreamWorks to outfit five of its malls with a Shrek-themed digital installation called Adventure to Santa. Visitors pass through "five captivating rooms" featuring wraparound screens and motion-based special effects.
For his part, Santa Bob doesn't need Shrek's help, but he does have advice for malls hoping to use Santa as a traffic magnet: Don't rush the experience. "Some malls are like: lap, photo, and off," he said. "There's no time to interact with the child." If you don't want the kid to start bawling, said Santa Mike, give St. Nick a little interaction time.
This story first appeared in the Nov. 2 issue of Adweek magazine. Click here to subscribe.