Gift Card Sales Help Boost and Extend Holiday Season for Retailers, Deloitte Survey Shows

As January unfolds, gift cards are breathing new life into the holiday retail season, so finds Deloittes new Post-Holiday survey. The survey, which polled 3,658 consumers in early January, found that 59 percent of all consumers received a gift card or certificate this holiday season, and that by January 5, 2004, 50 percent of gift card recipients had already redeemed some or all of their cards. According to the survey, on average, consumers received 2.5 gift cards that had a combined value of $106. Other key findings include: - 81% received at least one gift certificate to a store or mall - 36% received at least one to a restaurant/fast food establishment - 10% received at least one that could be used at a variety of stores/establishments (e.g., an American Express gift card) - 9% received at least one for a personal service, such as a manicure Gift Cards Ring in Additional Sales for Retailers For those consumers that have already redeemed their gift cards, most spent the full face value of the card. The average value of the redeemed card was $47.50, and the average that was spent in the store on that day was $47.20. Respondents who spent more, spent a hefty 89 percent more than the average face value, $90 versus $47.50. The survey findings also indicate that those most likely to spend more are, in large part, baby boomers -- consumers between the ages of 35 and 64. January Retail Sales to Receive Additional Boost from Gift Cards Because half of the respondents had not yet redeemed any of their cards by January 5, and because 37 percent of the consumers who had redeemed still had some unused balances on their cards, retail sales for January are likely to receive an additional boost from these redemptions. Consumers said they expect to use nearly all of their gift cards by the end of this month. Of the 2.5 cards received, consumers said they expect to have 2.4 redeemed by January 31. Gift Cards Continue to be a Popular Gift Choice Throughout 2004 More than half, 55 percent, of consumers said they will buy gift cards for others during the remainder of 2004. Other findings on gift card purchasing behavior include: - Deloitte survey findings show they expect to spend $151, on average, for gift cards during the year. - The 45-54 and 55-64 age groups will be spending the most -- $162 and $193, respectively. - Higher income households plan to spend the most on gift cards. Those making $100,000, or more, plan to give gift cards worth $217, on average. - Gift cards will also be used by some consumers for their own use. More than one in ten, 12 percent, said they had bought a prepaid gift card for their own use in 2003. According to Weiner, gift cards offer consumers greater convenience and choice in purchasing their gift. It also provides an opportunity for retailers since consumers oftentimes spend twice as much as the value of the gift card. The Early Bird Gets the Worm The majority of 2003 holiday shoppers were able to find the products they originally set out to purchase, however, 21 percent of respondents said they did experience some inventory unavailability while shopping. Additional Survey Findings - Survey results indicate that the 2003 holiday shopping season extended into the New Year. Consumers appear to be taking advantage of post- holiday sales - for both their 2003 and 2004 holiday gift giving. Eighteen percent of the 2003 holiday gift buyers said they made purchases between December 26, 2003 and January 5, 2004, even though the traditional gift-giving period had already passed. In addition, just over 10 percent of those surveyed said they had already started their 2004 holiday shopping. - Most holiday shoppers still flocked to the traditional shopping venues to purchase their seasonal gifts. On average, survey respondents said they spent 19 percent of their total holiday budget online. The $100,000+ income bracket