As consumers sharpen their pencils to cut down the size of their holiday gift lists, there’s one item retailers hope will fare better than last year: gift cards. For years, the gift card market has been growing quickly and is now valued at $24.9 billion. This year, Archstone Consulting predicts the industry will end the year somewhere between $23.67 and $24.9 billion or between a 5% drop to a flat outcome.
According to research compiled by Archstone Consulting, the gift card industry for the 2009 holiday season will be characterized by the following trends:
- Lower face value – The average value is currently $46. This is down $6 from last year.
- Practicality – Consumers will be purchasing more cards to be used for necessities, not frivolous products.
- Innovation – Companies are developing cards that can be used for medical services at health networks.
- Convenience – Merchants are experimenting with ways to allow consumers to purchase and send gift cards in a variety of ways and this includes online as well as in-store.
A recent Wall Street Journal article highlighted how many retailers are using gift cards to build traffic this year. Ideas range from Target cards that double as toys to Keurig cards for online coffee supplies. Marketers are clearly implementing new ideas to get consumers excited about shopping for that difficult-to-please friend or family member.[Sources: Archstone Consulting release, 10.08.09; Holmes, Elizabeth and Zimmerman, Ann. Retailers Turn to Gift Card Promotions, Wall Street Journal, 10.13.09 ]