Tapping the Full Year-Round Potential of Gifting Market

In Industry Experts, What's New by Accessories Staff

giftStevens, PA—Retailers’ conventional wisdom is that on “Black Friday the bottom line of retailers’ account books goes from red ink to black as annual losses turn to profits. It might have been true once, but not anymore, according to a new report on the gifting market from Unity Marketing.

Retailers can’t wait until the fourth quarter any longer to make their money or profits, as shoppers’ behavior has changed. Back in 1995, nearly one-third of the typical retailers’ revenues was generated in the last three months of the year. In 2014 it had dropped to 29.4%   The fourth quarter is not the money maker it once was for retailers.

“The incredible build up retailers make around the Christmas holiday shopping season is no longer paying off. Yearly retail sales quarter-to-quarter are flattening out and retailers’ chance to sell to the gift giver isn’t an end-of- the-year opportunity any longer, but one that extends throughout the entire year,” says Pam Danziger, president of Unity Marketing and author of the new Gifting Report, based upon a survey among 1,650 gift shoppers (avg. income $97.9k).

giftschartUnity Marketing estimates that the gifting market totals $131.3 billion, and represents about $1 out of every $10 spent in the type of stores that fill America’s malls and shopping centers, the big boxes that line the streets and highways and the shops along main streets across the country. And increasingly, more of those gifting dollars are not going to those stores at all, but being spent online, as gifters turn to the Internet to select, research and buy gifts.

The New Normal

The new study reveals that gifters spent an average of $1,851 on gifts and gift wrap, cards and other gifting accessories in the most recent year. Approximately 45% of that spending went toward buying Christmas gifts, down from 48% in 2009. Further spending on Christmas gifting, after rising in 2012, settled back to 2009 levels last year.

“For Christmas 2015, we don’t expect to see much change,” Danziger explains. “Some 70% of gift shoppers expect to spend the same on gifts in 2015 as they did in 2014, which doesn’t bode well for 4Q2015. Retailers will need to pull some real magic out of their hats to get gift shoppers excited and spending this coming holiday season.”

While Christmas gift spending was flat from 2009 to 2014, overall spending on gifting increased 6.4%, meaning the opportunity for retailers to grow their share of the gifting market largely rests on attracting gift shoppers throughout the rest of the year, for other holidays and gifting occasions like birthdays, anniversaries, weddings, and so on.

Amazon.com surges ahead to be gifters’ favorite shopping destination, knocking out Target and Walmart, tied as their favorites in 2010.

In addition, a new section of the study is devoted to how gifters use the internet in planning their gift purchases, researching where to buy and prices, and ordering online. “Internet shopping for gifts is a real game changer that is disrupting the gifting market, having replaced discount department stores and mass merchants, including the websites of those stores, as their preferred gift shopping destinations. That means Target, Walmart, Kohl’s and others are losing a big share of the gifting business to Amazon.com, eBay.com, Groupon.com, Etsy.com and other etailers.”

giftchart2“While the annual year-end holiday gifting season receives the lion’s share of marketer and retailer attention when it comes to the gifting market, the reality is that gifting represents a significant marketing opportunity throughout the whole year,” Danziger says. “Out of the typical gifters’ annual gifting budget, Christmas accounts for slightly less than half of the total. The majority of gift purchases are made the rest of the year.

“Marketers and retailers need to understand the gift buying and shopping behavior of customers in order to attract them and meet their needs with suitable gift ideas and gift shopping experiences.

About Pam Danziger and Unity Marketing

Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Danziger received the 2007 Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum by Harper’s Bazaar. Luxury Daily named Pam to its list of “Women to Watch in 2013.”   She is a member of Jim Blasingame: The Small Business Advocate’s Brain Trust and a contributing columnist to The Robin Report, a monthly newsletter for senior executives in the retail, fashion, beauty, consumer products and related industries.

Pam’s latest book is Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury (Paramount Market Publishing, 2011). Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006; Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don’t Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).


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