Holiday Shopping: Its in the Cards

Moreover, renewed optimism about job security, especially among upper income households, is expected to provide an overall boost to retailers this holiday season, particularly to luxury retailers. For the first time since their inception, gift cards both nationally and locally will replace apparel as the gift purchase of choice. This year, 68 percent of Richmond area consumers, compared to 64 percent of national shoppers said they intended to buy gift cards, more than double the percentage of consumers that will give a gift of money this holiday season. The increase in gift cards comes at the expense of such holiday gift staples as apparel, CDs, DVDs, tapes, and books. Among other findings, Richmond consumers: -- Look for convenience in choosing a place to shop (57 percent of Richmond shoppers to 55 percent nationally); -- Select value as the chief criteria for the stores in which they choose to shop (48 percent to 44 percent); -- Shop the internet more frequently for holiday gifts (59 percent to 53 percent); -- Shop home improvement stores for holiday gifts (27 percent to 20 percent nationally); -- And shop in traditional department stores more frequently than national shoppers (48 percent to 45 percent). While gift cards are especially popular among shoppers over age 65 and those with incomes of more than $100,000, on average, Richmond respondents reported they planned to buy four cards each. These same respondents reported holding 2.7 cards unused from last year. Unused cards represent an opportunity for retailers who may want to consider new ways of enticing these gift-card holders into their stores - particularly since the results of the Deloitte post-holiday survey in January 2004 showed that many consumers buy more than the face value of the card upon redemption. Positive Holiday Shopping Outlook Overall, 71 percent of Richmond area households surveyed said they are likely to spend the same or more this year than last. As a result of these survey findings, coupled with an improved economic picture relative to last year, Deloitte expects non-auto holiday sales to increase in the 5.5 to 6 percent range during the November through January period. As Jacoby reports, the survey highlights three key consumer trends of interest to retailers: Consumers will make Gift Cards the top gift purchase in 2004. Gift cards will be purchased for a wide range of stores and services. More than half of Richmond area consumers will purchase cards for stores or products (56 percent); 36 percent will buy cards for restaurants (compared to 34 percent nationally) and 27 percent will buy cards for services or experiences, the same as the national average. The growing use of gift cards places added importance on January retail sales as shoppers redeem their cards. Higher and lower income households differ on holiday outlook. Lower income respondents have more concerns than upper income groups over rising gas prices, health care costs and job security. Consumers say they will spend about the same or more as last year, but choose more shopping options. Continuing a trend of the last several years, 59 percent of Richmond area consumers, as compared to 53 percent of national shoppers, report that they will shop the internet. This trend is understandable in light of todays time-pressed shoppers and the growth in 24/7 Internet shopping. It also emphasizes the retailers challenge to effectively enhance the total customer shopping experience as a means of driving increased sales. Cautious Optimism The share of Richmond area consumers who plan to spend more or the same - 71 percent - represents cautious optimism. This outlook is an indication that Richmond area consumers are relatively confident about their individual job security and o