Holiday sales

For retailers, nostalgia-driven novelty for the holidays

December 18, 2013: 3:07 PM ET

A portable vinyl record player that resembles a small suitcase. A $300 radio named after a picturesque Swiss city. A silver-plated yo-yo. Apparel retailers see the holiday season as a chance to reinforce their position in the market, and they're doing so without selling clothes at all.

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FORTUNE -- Richard Tymkiw, a 59-year-old attorney from London, walked into the Urban Outfitters store on Fifth Avenue in New York City looking for a shirt for his son for Christmas. Instead, he spent most of his time browsing old vinyl records and reminiscing about the past.

"This is purely selfish, because I saw the music rack and I had a record player about 30 years ago," Tymkiw said as he picked up Miles Davis' Kind Of Blue record. "I just came out of H&M and there is a much more interesting design in here."

Urban Outfitters (URBN), the trendy clothing retailer that also operates Anthropologie and Free People, is by no means in the business of selling music makers. Yet the store made popular by Millennial hipsters and prepsters alike is devoting significant floor space in some of its stores to selling vinyl records and Crosley portable record players that range in price from $98 to $160.

The reason: Urban is one of several retailers that are tapping into the buying power of nostalgia during the holidays.

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As retail's high season approaches its peak, thousands of atypical customers like Tymkiw are entering stores like Urban for possibly the only time all year. Stores are  flooded with visitors looking for a meaningful and distinct present for loved ones. Selling a unique item from the past, such as a quirky record player, is one way for Urban to stand out among its competitors while tapping into the sentimental longing of the holidays, said Eric Beder, a consumer and retail analyst with investment bank Brean Capital.

"They are still making their living selling T-shirts and jeans," Beder said, adding that nostalgia items like record players probably make up only 10 percent of the brand's overall business. "But Urban Outfitters wants to zig when everyone else zags. If other retailers start selling record players, they will move away from it." Urban Outfitters could not be reached after multiple requests for comment.

Holley Sorrells, a manager at the Fifth Avenue Urban Outfitters store, said the location has been carrying vinyl records and record players for about four years and the offering has become an "institution." Her store had the highest sales in the vinyl department across the company last week after selling roughly $8,600 worth of records and players, she added.

"A lot of parents grew up listening to vinyl and now they want their kids doing it," said Sorrells, who has worked at Urban Outfitters for five years. "Also, I see a lot of people in their early 20s coming in and wanting to figure out what it is all about."

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Francesca Falzone, 23, is a part of Urban's traditional customer base and was intrigued by the record display when she visited the store. She walked in looking for a present for a friend, she said, and walked out with a $100 record player and a vinyl.

"Music connects a lot of people and I think that my friend is deeper than she presents herself," she said. "If I give her an album that I listen to I think we'll connect on a different level."

Falzone is hardly alone. Instead of giving two-dimensional presents like gift cards or sweaters, most people enjoy buying presents that symbolize how they feel about someone else, said Paco Underhill, the founder of consumer-behavior research and consulting firm Envirosell. Nostalgia items from a different generation are the perfect way to do just that.

"By triggering a memory or inspiring a young person to investigate something from the past, these gifts give a little richness that is deeper than picking up a scented candle," said Instyle lifestyle editor Joanna Bober, who is also responsible for the magazine's annual holiday gift guide.

Which means Urban Outfitters' strategy is shared by many other retailers during the holiday season: Club Monoco is selling a $300 world radio in its holiday gift guide, Kate Spade and Pottery Barn (WSM) are featuring silver and steel yo-yos and J.Crew's Liquor Store location in Manhattan is selling a book about vintage menswear. Anthropologie, one of the other brands owned by Urban, is even selling a $700 vintage typewriter.

MORE: J.C. Penney's lost game plan means shoppers' gain

But not every retailer can take advantage of nostalgia's buying power during the holidays, Underhill said. Urban Outfitters and Anthropologie are at an advantage during this time of year because items from the past, like record players, fit right into their everyday merchandising. Still, that hasn't stopped discount stores like Bed Bath & Beyond (BBBY) and Target (TGT) from selling the record players as well.

"Record players looks better there then it would at a lot of other place," he said. "They can make it look cool, which is something that Kohl's would never be able to do."

When Tymkiw finally left the Urban Outfitters store, he did not have the Miles Davis record that he was reminiscing about with him. What he did bring with him, however, was a strong impression of the retailer and a desire to come back -- something that may be even more valuable to Urban.

"This is just great amusement and nostalgia for me," he said. Then he smiled.

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