With October 31 and the annual bout of trick-or-treating behind us, the industry is gearing up for Halloween 2009 as it prepares to descend on New York for the fourth-annual International Halloween Show in December. The market, hosted by the Halloween Industry Association, is a retail buyer-focused event, and HIA chairman Stephen Stanley says it’s been growing steadily each year as consumer demand shows no signs of slowing down.

In fact, Halloween 2008 sales were up in spite of the economic downturn currently gripping the US. According to statistics from an online survey conducted by the National Retail Federation, US consumers plunked down US$2.1 billion on costumes, up from the US$1.82 billion spent in 2007. Similarly, the average per-person Halloween spend has jumped from US$41.77 in 2003 to US$66.54 in 2008. Halloween sales also tend to fare much better when October 31 falls on a weekend, as it did this past year. Families – particularly adults – hold more parties if the date aligns, and sales can spike by as much as 10%, notes Stanley, who’s also EVP of Poway, California-based costume manufacturer Disguise.

He says licensed costume sales have doubled over the last five years, and estimates that kids licenses account for approximately 80% of those sales, adding that new opportunities exist for properties with layers of appeal. Stanley cites Spider-Man as a prime example. Disguise has been successful in offering Spidey costumes in a variety of sizes, from infant right through to adult – and not just for boys and men, either. Spider Girl and Spider Woman costumes have proven to be quite popular for the manufacturer. And just this past season, Disguise forged a retail exclusive with Spencer Gifts’ pop-up Spirit stores to sell adult-sized Sesame Street costumes for the first time. Such crossovers, says Stanley, represent an emerging trend in the costume world.

Rubie’s Costume Company, another large category player based in Melville, New York, also holds several major kid-friendly licenses, including Indiana Jones, Star Wars and Batman. EVP Howard Beige says that roughly 75% of Rubie’s licensed stock is comprised of children’s costumes, and one of the company’s strengths is creating products at different price-points to bring in a fuller range of consumers and a significantly wider variety of placement at retail. Lower-end outlets such as dollar stores, typically sell costumes for under US$10, while national mass retailers stock costumes in the US$15 to US$20 range. And costumes made for specialty, internet and catalogue channels can command price-points in excess of US$30.

As with the toy industry, a longer-lead sales cycle is developing with retailers. Disguise, for example, was busy selling its Halloween 2009 lines to mass-market retailers in mid-October, with some looking to close orders by the end of the year. In previous seasons, orders wouldn’t be completed until as late as the end of March. To accommodate this welcome change, Disguise has moved up its development schedules and is looking for next year’s hot licenses earlier than ever.

Also worth noting is the fact that retail channels for Halloween goods are expanding in the US. ‘Not only do you have the mass-market retailers, the specialty stores, custom shops and toy stores,’ says Rubie’s Beige, ‘but there are now thousands of temporary Halloween stores that open up around the country.’ He estimates that the footprint of these seasonal shops is growing significantly – to the tune of between 15% and 20% year on year. The temporary shops open their doors anywhere from 60 to 40 days before Halloween and close in early November. Some of the more popular temp chains in the US include the aforementioned Spirit, Halloween Express, Halloween Adventure and Party City’s Halloween USA. Though Beige couldn’t divulge details on temporary outlet sales versus regular retailers, he did confirm that the shops are buying more costumes each year.

Interestingly, Beige has observed that retailers are stepping up product presentation for the season, particularly specialty and temporary retailers aiming to stand out from the clutter. Thus retailers are piling on the decorations and setting up in-store boutiques for the more popular themes and characters. A boutique for Batman, for example, might carry kids and adult costumes, along with all the different accessories necessary to complete the look of the ensemble, such as Batman’s grappling hook, gloves and bat-shaped boomerangs.

In fact, strong theatrical results for such superhero properties generally create opportunity for cross-promotion with other licensed products. For Halloween 2008, Disguise’s Iron Man costumes and the Iron Man DVD had a joint promotion at Walmart, and Stanley says he’s in discussions with partners to create more of these types of deals with other entertainment licenses next year.

Costume technology has also received a boost in recent years. Rubie’s has been inserting battery-powered fiber optic strands into kids costumes to make them both more visible at night and more attractive to retailers, which can then promote the product’s safety factor. Though the company started using fiber optics roughly six years ago, Beige says the technology costs have really come down. Rubie’s was able to roll the tech into mass-market product lines for the first time last year. The souped-up costumes now run between US$20 and US$25, as opposed to US$50 when the tech was first introduced.

Costumes remain the top retail category for Halloween sales and are largely driven by hot licenses. L.A.-based industry and market researcher IBISWorld recently reported that the category accounted for 35.9% of the holiday’s estimated US$5.77-billion take this year. But what of the runner-up, candy? While the same IBIS report found that candy accounted for 30.5% of Halloween 2008 sales in the US, just a fraction of those sales were from licensed sweets.

David Abramson, director of marketing for Reading, Pennsylvania-based candyco R.M. Palmer, says between 60% and 70% of its sales take place in the week leading up to Halloween, but licensed goods make up only 10% of its product offerings. Currently, R.M. holds candy licenses for It’s Happy Bunny, High School Musical and NASCAR.

Interestingly, the annual trick-or-treating frenzy that takes place on October 31 is only the third-largest selling season for candy, behind Valentine’s Day and Easter. Halloween candy sales, however, are steadily increasing. The National Retail Federation reports that US$1.77 billion was spent on candy this year, up from US$1.55 billion in 2007, with the average US consumer spending US$20.39 on the product.