Two big elements of the spring consumer spending season – proms and graduations – are worth another look for their ripple effect on merchants and small businesses in your area.
From bookings at restaurants, hotels and catering companies to spending on gifts, dresses and amenities, the end of the school year produces a good chunk of business for a variety of local companies – which this year may be counting on event-driven spending even more, as rising gasoline and food costs likely are taking a bite out of casual or impulse spending.
Prom season is under way, depending on your area’s school calendar and customs, and in many communities the accouterments and rituals rival those of lavish weddings or other grown-up festivities. I was checking into a hotel in a Gulf Coast tourist town recently; the clerk interrupted my transaction to take a phone call and then apologized, saying “It’s been ringing off the hook all day with prom reservations.”
You can survey area hospitality firms and services like limo companies, tent rental agencies, caterers, jewelers and others about bookings and sales vis a vis last year and compile the results as a sort of economic indicator, or just profile some of these providers to illustrate how small firms that depend on discretionary spending are weathering the stagnant economic recovery. And look for interesting niche businesses, like Carolina Proms and After-Proms, which puts together hospitality packages, entertainment and other deals so prom organizers or school officials don’t have to. Note the various options and price points detailed on the site. Other companies find creative ways to get in on the act; the St. Paul Hotel in Minnesota offers a three-hour Prom Prep etiquette training dinner for $75 a person to ensure teens party with polished manners.
According to this 2009 L.A. Times article, proms are a $4 billion industry in the U.S., though frugality has been a new prom vogue in recent years. And this piece from the Danbury, Conn. News-Times, “The business of the high school prom,” is a nice look at how the dances provide trade for local dress shops — but what’s really interesting is the sidebar with results from a local survey on prom spending; the writer found that girl prom attendees in that community spend $622 to $919. while boys’ outlay is lower at $219 to $302. There’s a breakdown of how those costs mount up.
Meanwhile, the graduation engine is gearing up, with similar opportunities for restaurants and catering services, as well as merchants selling grad-related gifts. According to last year’s survey by the National Retail Federation, about one-third of those polled planned to buy some sort of graduation gift, spending an average of $89.95.
I’ve noticed grad-related marketing themes emerging in sales circulars for a variety of national chains and local companies; you could have fun coming up with some hypothetical local-impact figures based on the number of grads in your region multiplied by spending averages, etc. (Clearly unscientific but a local university, bank or brokerage firm economist may be willing to help you refine the methodology.)
Caterers, DJs and event organizers told me last year that some economy related trends included later bookings, bookings that included the same level of amenities as pre-recession but for fewer people and patrons waiting longer to send out invitations to events, as though weighing cost considerations till the last minute. All good conversation-starters for interviews with your area’s prom and graduation vendors.