According to the National Retail Federation, Halloween spending is expected to reach a record number of $13.1 billion this year — up from the $11 billion that Americans spent the year prior. It’s a heck of a haul for a holiday built upon fun-sized candy bars.
“There's some inflation in the prices, but there's been real strong growth of Halloween sales and consumption-related things over the last 10 years, primarily because it has shifted into covering more areas of our lives,” says Bryant Economics Lecturer Liam Rice, noting that in addition to parents taking their kids trick-or-treating, there are more teen and adult-themed activities that have led to the holiday’s larger market size for costumes and decor.
The brands are getting into the fun, too. Sharmin Attaran, Ph.D., professor of Marketing and director of Bryant’s Digital Marketing program, adds that Halloween “gives brands permission to break character and experiment with playful content without diluting their core identity” while also creating seasonal engagement.
“It’s one of the few holidays that blends playfulness, nostalgia, and social participation, making it ideal for storytelling and consumer engagement,” adds Associate Professor of Marketing Kacy Kim, Ph.D.
Below, Rice, Attaran, and Kim explore the business of fright’s killer success.
Leveraging the short-term
When you weigh demand for different markets and goods, it usually comes down to substitutes. For instance, if a product has many substitutes, then there's not as much pricing power and not as much demand. But, if something is unique, a lot of market activity is generated for that specific item.
“Halloween's a pretty inelastic holiday,” notes Rice. “There's not a lot of other holidays during the year that you can substitute away from spending money on Halloween and use it on a different holiday to get the same value out of those experiences. So, the mix of not being able to substitute around, as well as the short time frame, heightens the demand.”
Pop-up Halloween stores like Spirit Halloween have done so well because of their short-term nature. Additionally, pop-up shops minimize fixed costs, which lessens costs for consumers.
“Spirit Halloween benefits so much from economies of scale because, even though there are all these little pop-ups, they have one centralized company that gets to do all the buying and procuring of stuff at such a big scale, so they get better pricing with their suppliers,” Rice says.
The company’s business model also includes renting empty big-box spaces in high-traffic areas.
“Dead malls work in their favor,” Attaran says. “They get prime locations at a fraction of normal costs. They open in early August to capture serious planners and stay through early November for clearance shoppers.”
The company’s inventory closely tracks pop culture trends.
“If a show blows up on Netflix in spring, like K Pop Demon Hunters, they're manufacturing those costumes by summer,” says Attaran.
What really sets Spirit Halloween apart is how it uses real-time data to stay ahead of pop culture, adds Kim. “Beyond historical sales, the company tracks social media chatter, search trends, and influencer buzz to forecast what people will want next,” she says. “When Barbie and Wednesday Addams took over TikTok, Spirit expanded those costume lines almost instantly. Even this year’s craze for inflatable costumes was spotted early through social listening.”
Attaran says that Spirit Halloween’s store layout is designed to drive impulse purchases.
“You plan to buy a $40 costume but leave with $120 in accessories because everything is strategically placed. Ultimately, Halloween shopping is more fun when it’s experiential, where you can touch and feel products,” something that’s still difficult to replicate online, she says.
Creating a positive feedback loop
Rice says that Halloween is a great example of network effects, which occur when a service’s value increases as more individuals use it and creates a positive feedback loop that enhances user engagement and growth.
“When you buy a Halloween costume and wear it, you get a benefit from that, but so do other people that aren't part of your transaction. If I went and got a Halloween costume, it now improves my experience because we both have costumes,” Rice says.
He adds that the fear of missing out (FOMO) plays a key role.
“In economics, we would call FOMO loss aversion,” Rice says. “Because it's such a limited time span for Halloween and you can't substitute it, there's an increased willingness to pay in October, even if the value that you're getting may be the same; you're worried about losing out on that stuff.”
Attaran calls FOMO “Halloween's secret weapon.”
“Limited-edition products and while-supplies-last messaging create urgency,” she says. “Hershey's releases special packaging available for only six to eight weeks, making purchases feel now or never.”
Nostalgia also drives sales. “Spirit Halloween brings back costumes from shows that haven't aired in 20 years because adults buy them for themselves,” Attaran says. “Target even creates sections that feel like 1990s Halloween stores.”
The combination of FOMO, nostalgia, and influencer marketing, like ‘haul videos’ and costume tutorials, turn Halloween into more than a shopping season. “It becomes a cultural event that blends creativity and emotion,” says Kim.
“A creator with 50,000 followers styling a $30 costume can beat million-dollar campaigns,” notes Attaran.
Kim says Halloween marketing this year “feels bigger and more creative than ever.”
“Brands are really leaning into storytelling and personality, using Halloween as a chance to experiment and have fun,” she says. “We’re seeing everything from Skittles’ “Ghost Roommate” TikTok sitcom to Six Flags’ full-on horror short film and Gushers’ “Fruithead,” which plays like a mini movie. It shows that audiences love cinematic storytelling, not just quick gimmicks.”
Following where the money leads
Today, Halloween’s top three spending categories are costumes, decorations, and candy. The National Retail Federation expects to see $4.3 billion spent on costumes, $4.2 billion spent on decorations, and $3.9 billion spent on candy.
Rice notes that spending has shifted with decor purchases, surpassing the amount of money spent on candy.
“Decorations are now a lot more than just paper decorations or carved pumpkins on the front lawn,” Rice says. “People are buying a lot more durable decorations at a higher price, such as LED lights and lawn ornaments.”
He anticipates continued growth in experiential Halloween-related activities, such as Halloween rides and haunted houses but believes that costumes, candy, and decorations could be reaching saturation.
“There's only so much square footage you have on your body and on a house to put stuff. Will the number go up in nominal dollar terms, yes, because there's always inflation, but real consumption is probably going to tail off,” Rice says.
While in-person shopping for Halloween still had an edge, Attaran says technology is making online purchasing easier.
“Alternate reality try-on features remove the biggest barrier to online shopping,” she contends. “Apps let you virtually try costumes or test makeup looks before buying. People can decide on a costume and have it within hours. This extends the shopping season because procrastination is enabled, not punished.”
AI personalization also is getting more sophisticated.
“Upload a photo of a costume you saw on TikTok, and Pinterest Lens or Google Lens identifies where to buy it,” Attaran says.
“What’s fascinating is how all this blurs the line between spooky and digital,” says Kim. “We’re seeing technology bring ghosts — and Halloween itself — to life in new ways.”