8 Retail Lessons from the CEO of Spirit Halloween Stores

What will you go as for Halloween? Whether you dress up as Shrunken Head Bob from Beetlejuice, put on your Barbie pink, or choose the more traditional zombie scarecrow, costumes never go out of style. That’s why most people have spent at least a few frightening moments in a Spirit Halloween, the U.S.-based costume retail store that pops up for two or three months before the October 31 Halloween holiday each year.

Steven Silverstein WG85, CEO of Spencer Gifts and Spirit Halloween Stores, sat down with Barbara Kahn and Americus Reed, marketing professors at the Wharton School of the University of Pennsylvania, to share insider Spirit retail strategies. You can listen to the full episode on the professors’ Marketing Matters podcast.

Here are business highlights from the “Halloween headquarters:”

🎃 Spirit Halloween, which has 1,530 stores across the U.S. and Canada, is the only retail concept that tears itself down after October 31 each year and opens back up again the following summer – on a rolling basis, starting August 1. Silverstein and his team look at it as starting with a blank canvas, noting the current trends, and building from there. “We’re very intentional about the stories we’re telling,” he said, so you never quite know what you will get.

🎃 Different from other retailers, Spirit Halloween is all about the experience and the immersion. “We call it five senses retail. I want you to see it, I want you to hear it, I want you to smell it, I want you to touch it, and I almost want you to taste it,” observed Silverstein, a Wharton MBA. “That is the way Spirit thinks of our concept every year.”

🎃 An originator of the pop-up store concept or temporary retail, Spirit Halloween needs to be flexible, which requires work. “We have an ideal layout and formula, so we’re looking for big box stores, and we’re looking for visibility and those kinds of opportunities. But, depending on what space is available, we have to bob and weave,” noted Silverstein, adding that the company looks at four spaces for every one store that it rents to set up its annual retail locations.

🎃 Customer preferences require Spirit to take a unique marketing approach. “Whenever we talk about marketing and creating CRM (customer relationship management), the customer’s last purchase is usually indicative [of their next],” noted Silverstein. For us, we think, ‘You were a pirate last year, now what are you going to be?’ We’re so not interested in that specific element [of what you bought before]. We’re interested that you came and had a good time. I want to know who you are, and I want you to go into the store and have a good time…every year will be a different inspiration.”

🎃 Spirit Halloween, as a retailer, works to be tactile, engaging and interactive. “We want people to go [to our stores] as a social experience,” said Silverstein. “We want them to go in groups and post their experience online. This is the earned media we get (publicity or exposure that the company doesn’t have to pay for). We provide the backdrop, and [customers do the rest].”

🎃 Logistics look a little different, too. “We are a Halloween outlet right to the very end. Most seasonal stores are trying to exit their concept sooner, while we are fully in stock [until November 3],” said Silverstein. “Part of our model is that we carry over inventory from year to year and have to make sure we maintain that. We store it locally.”

🎃 Spirit Halloween exists in the gig economy. The company has more than 250 permanent employees, including buyers, operators, and people along its supply chain. “Then we have the next layer, which I call the field operators or district sales managers. There are 400-450 of those, of which about 75% come back to us every year, and they work from May to November,” said Silverstein. “They organize their world around coming back. Retired schoolteachers, retired retailers and artists…we are all about our frontline workers,” and they represent our stories and have a passion for Halloween.

🎃 Won’t this concept also work as a Christmas pop-up? Silverstein has heard that question before. And the company is considering Spirit Christmas. “We are purely testing things right now,” he noted. “Spirit creates a social experience for an event. Our brand is about bringing people into a hands-on environment. We’re talking about the way we used to shop for Christmas. We are going to have Santa in the stores. It will be the love and the humor that you find in Spirit. That’s the rationale. I’ll talk with you next year about how it goes.”