Consumers spend more than the face value to treat themselves
NEW YORK; Nov. 28, 2006 – Consumers are putting gift cards on their holiday wish lists and plan to spend more than a gift card’s value when they redeem it, according to the findings of an Accenture (NYSE: ACN) survey of 545 consumers in the United States.
Nearly four in 10 respondents (36 percent) report preferring to receive a gift card versus a gift, and almost half (48 percent) say they spend more than the value of the card. Almost two-thirds (64 percent) of respondents plan on using the cards to “treat themselves” to something they would not otherwise buy, while just one-third (33 percent) plan to use their gift cards to buy sale items. Just 23 percent intend to spend a gift card on necessities or practical items.
The survey finds gift cards are used widely. Almost three out of four survey respondents (72 percent) have given or received gift cards, and most reported that those gift cards were for apparel, electronics and entertainment (books, movies and music).
The survey also reports that the vast majority (91 percent) of consumers purchase gift cards at the issuing store, versus 16 percent who do so over the Internet and 2 percent who buy them via telephone or mail order. One in five respondents (20 percent) said they spend more on a gift card than they would on a gift.
“This is a wake-up call for retailers looking for ways to increase sales,” said Janet Hoffman, managing director of Accenture’s Retail practice in North America. “Post-holiday shoppers with gift cards are likely to look for full-price merchandise rather than for the typical post-holiday bargains. Smart retailers will make sure there is brand-new product in the store for these gift card shoppers.”
The majority of respondents (57 percent) say gift cards are more convenient than buying gifts and 51 percent said they purchase gift cards when they don’t know what else to buy. More men (63 percent) buy gift cards out of convenience than women (53 percent). Men buy gift cards most often for electronics (36 percent), while women more often buy them for apparel (35 percent).
Nearly six in 10 respondents (59 percent) who have received gift cards say they spend the full value of the card all at once, while 38 percent use them in two or three visits. Almost one-third (32 percent) spend their gift cards in one month or less and 45 percent of respondents said it takes them one to three months to spend them.
The growing popularity of gift cards has created a secondary market, where consumers can sell cards they don’t want at a discount. However, just 9 percent of respondents knew they could buy pre-owned gift cards at a discount. Nevertheless, 60 percent of respondents said that fraud concerns would prevent them from purchasing a previously owned gift card from a source other than a known merchant.
“Gift cards have the potential to change holiday retailing, and retail in general, as much as online shopping has,” said Hoffman. “Retail leaders need to understand the changes and be able to adapt to them -- whether that means how signage is placed, when new inventory is delivered, the number of sales people on the floor or the type of advertising and promotion planned for pre and post-holiday.”
Among the survey’s other findings:
• Half (50 percent) of respondents spend $26-$50 on a gift card, while approximately one-third (32 percent) spend $11-$25.
• Nearly three out of 10 respondents (29 percent) who live in or near a major city buy gift cards, compared with 19 percent of respondents in more rural areas.
• More than four out of five respondents (83 percent) appreciate having design options on gift cards, but only 17 percent said they would be more likely to buy cards because of design selections.
The Web-based survey of 545 U.S. consumers was fielded in October 2006.
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. With approximately 140,000 people in 48 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home page is www.accenture.com.