I subscribe to the Oxford English Dictionary word of the day e-mail.  “Alakazam” was the word selected for March 1.

 alakazam, int.

[‘Used as an exclamation imparting supposed magical power, as when performing a trick. Hence in extended use, connoting any sudden transformation or happening. Cf. abracadabra int.’]

Pronunciation: Brit. /ˌaləkəˈzam/,  U.S. /ˌæləkəˈzæm/

Forms:  19– alagazam,   19– alakazam,   19– alakazap,   19– alakazoo,   19– alakazoop,   19– alakazot.

Etymology:Apparently an arbitrary formation, invented to sound like a word in an unspecified foreign language, with the intention of creating an air of exoticism and mystery. In use as a magical exclamation perhaps approximately suggested by abracadabra n., although compare discussion below.

Earlier currency is suggested by the following (facetious) use in a street name:

1881 Daily Evening Bull. (San Francisco) 6 Aug. 1/5 Camp Capitola. Description of a New Seaside Resort in Santa Cruz County… The party who laid out the streets..gave vent to his facetious bent in naming them. Glancing at the names..are seen Fishbone avenue, Alagazam street, Rat Tail alley and Soda Water avenue.

Compare also the following earlier examples, in which this expression (in various spellings) is used facetiously with relation to the use of foreign words and phrases in English linguistic contexts with the intention to impress or to create an air of sophistication:

1884 Hawaiian Monthly May 119/2 At this point the conversation was interrupted by the tones of a deep, rich bass voice belonging to a gentleman, who sat directly behind the alagazam idiot: ‘Asinus, asini, asiniorum’.

1896 N.Y. Tribune 24 May 17/6, I ain’t had a square meal sence Been fillin’ up on Charley horse rusies, sooflay de allakazam, an’ all them French dishes.

The form Alagazam is also attested earlier in popular music, earliest as the title of composition first released as a ragtime piano score and subsequently published with lyrics:

1902  A. Holzmann ‘Alagazam!’ Cake Walk, March and Two Step 3 The theme and title of this composition suggested itself to the writer during a trip to the South where he saw a colored regiment, who, while marking time during drill..were uttering a peculiar refrain which sounded like—Alagazam! Alagazam! Alagazam! Zam! Zam!

1903  A. Holzmann Alagazam. Song. 5 Zam Zam Zam was the title they gave him Zam Zam Zam our mighty Alagazam.

With the explanation given by Holzmann for the title of his piece compare the later composition by Harry von Tilzer and Andrew B. Sterling entitled Alagazam to the Music of the Band (1915). With forms showing apparently arbitrary variation in the final syllable (as alakazoop, alakazoo, etc.), compare the following comic song, where a different alteration of Alakazam (apparently presented as though the name of a foreign country, state, or city) features in each successive verse (The Countess of Alagazoop, The Countess of Alagazip, etc.).

1904  R. Cole Countess of Alagazam 3 They christen’d a girl somewhere in the world, The Countess of Alagazam.

It has been suggested that the expression arose in the medicine shows that toured America in the late 19th and early 20th centuries, although contemporary evidence to confirm this appears to be lacking.

Used as an exclamation imparting supposed magical power, as when performing a trick. Hence in extended use, connoting any sudden transformation or happening. Cf. abracadabra int.

In quot. 1902 as part of an extended magical formula.

1902 Sun (Baltimore) 30 Mar. 12/1 It was a wishing-spell, and whoever repeated it could be anywhere or do anything he desired… It read like this: ‘Alakazam Bazazza Ki! Hickory Dickory Dock. Omega Om Opeeka Pi? O Donnerwetter Hoch!’

1904 Philadelphia Inquirer 28 Apr. 9/5 ‘Alagazam’—To make your eyebrows heavier apply daily with a small brush a lotion of olive oil..bay rum..quinine.

1920 El Paso (Texas) Herald 10 July (Comic Section, Katzenjammer Kids), I am Professaire Dopo Ze Hypnoteest! I get your lettaire!.. Alakazam! You sleep! When you wake up you are good leetle boys!

1930 Daily News (N.Y.) 2 Mar. (Final ed.) 35/1 ‘Alagazam’ a term in wide use among members of a profession which has long sickened reputable physicians and honest druggists, not to mention the general public.

1951  in Newslet. Amer. Dial. Soc. Sept. 22/1 The whirlwind courtship of Elmer Sitts… With Elmer and Gladys it was just slam, bam, Alakazam! Timber! This is it!

1988 N.Y. Post 21 Oct. 10/1 Sit down with these guys and—alakazam!—you’re in the Broadway world most folks thought was long gone.

2009 N.Y. Times (National ed.) 30 Oct. a23/1 He is unlikely to be judged kindly by subway and bus riders if they do not see—alakazam!—quick improvement in fraying service.

Most of these first uses have little to do with magic until 1902. Interestingly, the spelling is predominantly “alagazam”. Presumably, Magician Mark Wilson cemented the alternate spelling into common use due to his  marketing strategy of his show sponsor.  In his words:

Here is how the name “Allakazam” came about. Certainly, the tie-in with the “Wizard of Oats,” who magically created All Stars, was a natural for a magic show. To strengthen that association, “Allakazam” was incorporated into the show’s name. The word Allakazam itself has a magical connotation. The Wizard sang in the commercials …”Kelloggs All Stars, Allakazam. What a wonderful wizard I am.” Now that was a direct tie-in with that new product. Even more specifically, Allikazam was written with two lower case “l”s. This was to position the “K” as the center letter … AllaKazam. In that way, whenever the word AllaKazam was seen graphically, such as when it appeared at the top of the street sign-post on our primary set, it had the giant Kelloggs “K” logo as the middle letter.

– Wilson, Mark. “The Inside Story. Number 5.” In Genii. October 2003/Vol. 66, #10. P. 24. Ask Alexander (login required).

The logo in question can be seen at 1:00 and 1:26 here: