Figuring out what people want for the holidays might not be that difficult after all. According to recent research, consumers ranked gift cards as the number one most requested gift for the fourth straight year.
The National Retail Federation's (NRF) 2010 Gift Card Consumer Intentions and Actions survey, conducted by BIGresearch, found Americans will spend an average of $145.61 on gift cards this year, up from $139.91 in 2009. Overall, sales of gift cards are expected to reach $24.78 billion for the year when all is said and done. Nearly three-quarters of consumers are expected to purchase at least one gift card.
Consumers are not only going to buy more gift cards this year, but they will also spend more on those they buy. The average amount spent per card, according to the research, will jump to $41.48 this year versus $39.80 in 2009.
The top category of gift cards will be for department stores (39.2 percent), followed by restaurants (33.4 percent), bookstores (23.7 percent), consumer electronics stores (19.0 percent), entertainment venues such as movie theaters (14.1 percent) and coffee shops (13.9 percent).
"This holiday season we expect Americans to gravitate toward both sale and non-sale items, including gift cards, which in recent years have been passed up for heavily discounted merchandise," said Matthew Shay, president and CEO of NRF, in a statement. "With people focusing less on price and more on value this holiday season, Americans may choose to buy gift cards due to their convenience and popularity among gift recipients."
Discussion Questions: Considering the increased demand in the market, what can merchants due to increase the sale of their gift cards this holiday season? Have you seen gift card promotions that work particularly well?