According to a survey conducted by the National Retail Federation (NRF) in the first week of December of 2015, at the time the data was collected over nine in 10 consumers had yet to complete their holiday gift shopping. In fact, about eight percent said that they would not purchase their final gift until Christmas Eve, with another six percent waiting to purchase their final holiday gifts on or after Christmas.
For many consumers, this means stopping in at a favorite restaurant or store to pick up a gift card for someone on their shopping list.
With this in mind, many experts offer suggestions for consumers and retailers alike.
“After years of exchanging gift cards over the holiday season, consumers may want to try to avoid the potential awkward exchange when the card they’ve given their loved ones are worth less or more than the one they’ve received,” says Pam Goodfellow, Principal Analyst at Prosper Insights and Analytics, in an article on the NRF website. “However, there will always be an appetite for gift cards, especially with procrastinators who will wrap up their shopping in the final hours.”
Why This Is Important to Retailers
As we enter the last few days before Christmas, many shoppers will be heading to stores to make their final purchases. However, there inevitably will be some people on the consumer’s shopping list who are particularly hard to buy for.
This makes for the perfect opportunity for stores and restaurants to suggestive sell gift cards.
Not only do gift cards keep the retailer top-of-mind when consumers open their gifts on Christmas morning, it also gives them a reason to visit the store the week after Christmas.
“For retailers and consumers alike, the holiday season doesn’t end on December 25,” reports Kathy Grannis Allen in an article on the NRF website. “In fact, for many consumers the week after Christmas is more than just an opportunity to exchange that sweater from grandma. According to the survey, two-thirds (65.9%) of holiday shoppers said they are planning to shop – both browsing and buying – retailers’ after-Christmas sales. Specifically, 47.2 percent of shoppers said they would shop at a store and 43.1 percent will shop online that week. Nearly six in 10 millennials (18-24 year olds) will shop that week, both in stores (59.2%) and online (59.3%).”
According to the NRF, when consumers were asked when they would use the gift cards that they receive during the holidays, about one in five said that they would use it as quickly as they could. Another 42% said that they would watch for really good sales or promotions to maximize the value of the gift card. That means that if the after-Christmas sales are good enough, it could temp consumers into stores to use their gift cards.
The Gift of Shopping
Many retail experts are pointing out that experiential gifts (e.g., tickets to sporting events, concert tickets, a weekend getaway, etc.) are very popular this year. It could be argued that gift cards fit into this category.
If you think about it, a gift card to a restaurant or movie theatre is the same as buying actual tickets to an event. And, for people who love to shop, a gift card to a store could also be valued for the experience as much as the actual product that the consumer buys with it.
In their book, “Gen Buy: How Tweens, Teens, and Twenty-Somethings are Revolutionizing Retail,” Dr. Kit Yarrow and Jayne O’Donnell write, “As we’ve noted before, gift cards not only guarantee that just the right gift will ultimately be acquired, but they also provide the “gift of shopping.” Shopping with permission to buy in the form of prepayment is way more fun than shopping just to see what’s out there and to socialize.”
Therefore, it is no surprise that gift cards still remain the most requested holiday gift this year.
Counterpoint: Gift Cards Lack Personalization and Surprise
It needs to be noted that retailers might want to try to help the consumer pick out the perfect gift for their loved ones before suggesting the purchase of a gift card.
As Dr. Kit Yarrow points out in an article on Time.com, “While gift cards and wish list picks are never going to land in the worst gift ever category, there’s something missing in the transaction: relationship-fortifying thoughtfulness and the emotional boost that accompanies surprise.”
With only a few shopping days left before Christmas, many shoppers are going to be out and about looking to purchase the final items on their holiday shopping lists.
While helping the consumer find the perfect gift should be the first priority, suggestive selling gift cards is an excellent way to get consumers back into stores in the weeks following Christmas.
Furthermore, with experiential gifts becoming more popular, a gift card can actually be the perfect gift if the recipient is a movie lover or a huge fan of a particular bar or restaurant. And, if the person who the gift is for loves to shop, the “gift of shopping” might actually be the best gift that they could receive this year.
Photo credit: tales of a wandering youkai on Flickr.