In more fiscally conservative times, consumers saved money all year to spend on holiday gifts. The advent of easy credit and the growing economy of the decade just before the recession all but did away with the concept of holiday clubs. But this year, in an effort to attract shoppers and appear financially responsible, some marketers are once again promoting holiday savings programs.
Writing for the New York Times, Stephanie Clifford highlights how Toys ‘R’ Us has started to promote a card that will allow shoppers to build up funds in advance of the holiday season. The Toys ‘R’ Us program also pays 3% interest on the balance consumers save – an amount that far exceeds what they might expect to earn on a traditional bank savings account or money market fund this year.
Gerrick Johnson, an analyst at BMO Capital Markets, correctly observes that a couple of retailers began marketing these programs during last year’s holiday season. He also notes that these kind of programs show, “the economy’s still operating at a subpar level.” If these programs succeed, they also show that consumers have learned painful lessons about the dangers of overextending themselves on credit and are in no hurry to repeat their financial mistakes.
These programs can work to a marketer’s advantage as they can secure funds that consumers will spend with them later this year. More companies may be employing this strategy as the economy continues to move slowly into positive territory.[Source: Clifford, Stephanie. Toys ‘R’ Us Offers a Holiday Savers Club. New York Times. 15 Jun. 2010. Web. 23 Jun. 2010]