December 16, 2008
Consumers Focus on Basics, Buy Grocery Gift Cards
Dominick Lombardi and
his wife usually buy his mother-in-law jewelry at Christmas. This year,
they’re giving her a gift card to the Harmons grocery
chain in Utah.
"My mother-in-law
takes care of plenty of kids and grandkids, and this is the best gift for
her,"
Mr. Lombardi told the Deseret News.
"In
this day and age, with the economy the way it is, the thing you have to
do is take care of food and gas," he said. "Everything else is
extra."
Mr.
Lombardi’s mother-in-law will become one of the many consumers who receive
a gift card this holiday season. According to the National Retail Federation,
cards will be the most-requested gift this year.
"What
we are finding in general is that practical gifts are in this year," said
Ellen Davis, a spokesperson for the NRF. "So there’s no dispute that
will trickle into the gift market."
Harmons has seen its gift card sales jump
68 percent since Nov. 1 compared to the same period last year. Rhonda Greenwood,
a spokesperson for Harmons, said sales increased
"without the support of a media campaign" this year.
Albertsons,
with 44 stores in Utah, also reports more demand for its gift cards. Sales
are up 20 percent over last year.
Marsha
Gilford, a spokesperson for Kroger’s Smith’s Food and Drug business, didn’t
provide numbers but did say, "We’re definitely selling more Smith’s
cards for shopping at Smith’s."
Discussion Questions:
Will grocery store gift cards be up significantly this year and next
as a result of the economy? What does this say about the mindset of consumers?
Is there a set of best practices for grocers looking to build gift card
sales?
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For holiday season 08, practical gifts rule. And about the only gift more practical than a gift card is a gift card for those everyday staples that consumers shop for every week. I definitely expect we’ll see an increase in these types of cards, as well as more consumers redeeming their open-ended gift cards for more practical items.
For merchants, little time remains to create marketing messages that tee off the desire for practical gift cards for the holiday season. But given the current economic prognosis, there are plenty more gifting occasions in 2009 when marketing practical gift cards will be practically perfect.
While not surprising, I do think this sales increase indicates two trends. The first, as has been stated, is that people might be a bit more practical this year, and therefore instead of giving a tie that has led lights, people might give a gift card that is a bit more practical, and what can be more practical than food?
But I also think it is in an indicator that people are getting increasingly more lazy and less creative in their gift giving for the Christmas season. It is an easy alternative while buying your milk and cheese to just reach over the candy at the checkout stand, and grab a gift card. Nothing says I love you more than a gift card that can be used for toilet bowl cleaners and laundry detergent.
While this trend seems to be growing, it is hard to say it is good thing.
I can’t think of a less exciting or more boring gift. While I understand the practical side of this, it seems to me it would be much better to just give money than a gift card like this. And in this fragile economy, the store of your gift card could even go out of business before you could use it.
Generally if you ask anyone in retail about business they always say sales are up, whether they are or are not. So unless you see their actual sales reports on gift cards, it’s hard to form an opinion.
Gift cards do make a nice gift for older people who already have everything and don’t need more stuff cluttering up their home. Despite the weak economy, we still live in a society of wealthy people who can pretty much get what ever they want any time they want without waiting until Christmas.
While gift cards are practical, there is always a bit of disappointment when receiving them because they are not very personal. Gift card sales will probably be up because consumers are lazy. Grocers love selling them because they replace credit card sales which are more costly transactions. Grocers should be promoting them hard all year round. They can even discount them and be money ahead.
This trend should not be a surprise to anyone. Practical gifts, like cards, will be under many people’s trees this year. In fact in a recession it is possible to alter the patterns for future gift giving occasions as the recipients express their pleasure at receiving the gifts that help them with necessities.
How many times have you ever gotten away with giving your wife a new vacuum for your anniversary?
This ain’t happenin’!
Grocery gift cards make sense for some of us, trying to get it right for an extended family. For young parents, it can mean a lot when there are more purchases than budget this year. For young adults, it can mean a few luxuries from grocery stores–or help out with out only giving cash. Again, for some older adults, it is a chance to splurge a little, get things in for visitors, or stretch the grocery budget in January. Grocery cards, for the right person with their favorite store in mind, will be appreciated.
This is like giving a little kid socks and mittens for Christmas.
I think this recent data is not at all surprising. And I’m also quite shocked at some of the other comments posted here, especially the tone of scowling judgment. When, generally, the prepaid card market’s success is directly linked to the un-banked and under-banked demographic, a gift of a month’s worth of food is a luxury to the very segment that drives the explosive growth of cards. I hardly would call that ‘boring’ or uncreative. What does it matter whether the buying motive of gift cards shifts from ‘wants’ to ‘needs’? The fact that people are still spending helps all of us.
Anecdotal evidence in the UK points to lots of grocery gift cards being given. They are very prominently displayed at the checkout in branches I’ve recently made a point of visiting.
Consumers are “lazy” or “not creative” is really harsh language. As an “in-transition” professional caught up in an economic crisis as well as a financial one at the moment, I would prefer gift cards. Cash actually, but that is for another commentary. (LOL)
Why would I want to open another beautifully wrapped box wildly anticipating the “big gift” I have always desired; just like the 5 year old flying down the stairs and into the family room to see what is beneath the tree, only to be disappointed and depressed over the sweater, or the mittens, or even the socks my grandmother gave.
In a marketplace that has taken on “ZERO” Differentiation vs. all the competitors they have, nothing is any different this year than last year. Consumer Electronics = Same. Clothing = Same. Jewelry = Same. Fragrances = Same. There is so much sameness it makes you long for the days of simplicity in sameness.
In the area in which I live, Kohl’s, JCPenney, Target, HomeGoods, DSW, Old Navy, and the others whose names I cannot spell all have the same feel to them. Even Best Buy to Circuit City, Office Depot to Office Max to Staples are the SAME!
Every week, Best Buy vs. Circuit City, I review all the ads. Virtually the same thing. Nothing exciting. Laptops, Desktops, Printers, MP3s, Ipods, Cell Phones, Games, TVs, all the same…just a different store and slightly different price, and often the same brand but different model number to avoid the comparison price shopping.
Give me a Gift Card so I can spend the money in a way I want to spend it! Thank you very much.
Get used to it. Given the number of layoffs we’re going to see in 2009, expect an uptick in gift card sales for drug stores and gas stations, in addition to grocery stores.
Actually, Ben, my wife demanded a vacuum cleaner for Christmas one year. What can I say…above all, she’s practical. But even my wife wouldn’t want a grocery store gift card for the holiday.
Depending on their circumstances and psychology, many people love to get supermarket gift cards. As long as the store has a location nearby, there will be no returns for wrong color or size. Many folks are struggling, so a supermarket gift card is as close to cash as you can get. Many employers who formerly gave out turkeys transitioned to turkey coupons. Not much of a transition from turkey coupons to supermarket gift cards.
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For holiday season 08, practical gifts rule. And about the only gift more practical than a gift card is a gift card for those everyday staples that consumers shop for every week. I definitely expect we’ll see an increase in these types of cards, as well as more consumers redeeming their open-ended gift cards for more practical items.
For merchants, little time remains to create marketing messages that tee off the desire for practical gift cards for the holiday season. But given the current economic prognosis, there are plenty more gifting occasions in 2009 when marketing practical gift cards will be practically perfect.
While not surprising, I do think this sales increase indicates two trends. The first, as has been stated, is that people might be a bit more practical this year, and therefore instead of giving a tie that has led lights, people might give a gift card that is a bit more practical, and what can be more practical than food?
But I also think it is in an indicator that people are getting increasingly more lazy and less creative in their gift giving for the Christmas season. It is an easy alternative while buying your milk and cheese to just reach over the candy at the checkout stand, and grab a gift card. Nothing says I love you more than a gift card that can be used for toilet bowl cleaners and laundry detergent.
While this trend seems to be growing, it is hard to say it is good thing.
I can’t think of a less exciting or more boring gift. While I understand the practical side of this, it seems to me it would be much better to just give money than a gift card like this. And in this fragile economy, the store of your gift card could even go out of business before you could use it.
Generally if you ask anyone in retail about business they always say sales are up, whether they are or are not. So unless you see their actual sales reports on gift cards, it’s hard to form an opinion.
Gift cards do make a nice gift for older people who already have everything and don’t need more stuff cluttering up their home. Despite the weak economy, we still live in a society of wealthy people who can pretty much get what ever they want any time they want without waiting until Christmas.
While gift cards are practical, there is always a bit of disappointment when receiving them because they are not very personal. Gift card sales will probably be up because consumers are lazy. Grocers love selling them because they replace credit card sales which are more costly transactions. Grocers should be promoting them hard all year round. They can even discount them and be money ahead.
This trend should not be a surprise to anyone. Practical gifts, like cards, will be under many people’s trees this year. In fact in a recession it is possible to alter the patterns for future gift giving occasions as the recipients express their pleasure at receiving the gifts that help them with necessities.
How many times have you ever gotten away with giving your wife a new vacuum for your anniversary?
This ain’t happenin’!
Grocery gift cards make sense for some of us, trying to get it right for an extended family. For young parents, it can mean a lot when there are more purchases than budget this year. For young adults, it can mean a few luxuries from grocery stores–or help out with out only giving cash. Again, for some older adults, it is a chance to splurge a little, get things in for visitors, or stretch the grocery budget in January. Grocery cards, for the right person with their favorite store in mind, will be appreciated.
This is like giving a little kid socks and mittens for Christmas.
I think this recent data is not at all surprising. And I’m also quite shocked at some of the other comments posted here, especially the tone of scowling judgment. When, generally, the prepaid card market’s success is directly linked to the un-banked and under-banked demographic, a gift of a month’s worth of food is a luxury to the very segment that drives the explosive growth of cards. I hardly would call that ‘boring’ or uncreative. What does it matter whether the buying motive of gift cards shifts from ‘wants’ to ‘needs’? The fact that people are still spending helps all of us.
Anecdotal evidence in the UK points to lots of grocery gift cards being given. They are very prominently displayed at the checkout in branches I’ve recently made a point of visiting.
Consumers are “lazy” or “not creative” is really harsh language. As an “in-transition” professional caught up in an economic crisis as well as a financial one at the moment, I would prefer gift cards. Cash actually, but that is for another commentary. (LOL)
Why would I want to open another beautifully wrapped box wildly anticipating the “big gift” I have always desired; just like the 5 year old flying down the stairs and into the family room to see what is beneath the tree, only to be disappointed and depressed over the sweater, or the mittens, or even the socks my grandmother gave.
In a marketplace that has taken on “ZERO” Differentiation vs. all the competitors they have, nothing is any different this year than last year. Consumer Electronics = Same. Clothing = Same. Jewelry = Same. Fragrances = Same. There is so much sameness it makes you long for the days of simplicity in sameness.
In the area in which I live, Kohl’s, JCPenney, Target, HomeGoods, DSW, Old Navy, and the others whose names I cannot spell all have the same feel to them. Even Best Buy to Circuit City, Office Depot to Office Max to Staples are the SAME!
Every week, Best Buy vs. Circuit City, I review all the ads. Virtually the same thing. Nothing exciting. Laptops, Desktops, Printers, MP3s, Ipods, Cell Phones, Games, TVs, all the same…just a different store and slightly different price, and often the same brand but different model number to avoid the comparison price shopping.
Give me a Gift Card so I can spend the money in a way I want to spend it! Thank you very much.
Get used to it. Given the number of layoffs we’re going to see in 2009, expect an uptick in gift card sales for drug stores and gas stations, in addition to grocery stores.
Actually, Ben, my wife demanded a vacuum cleaner for Christmas one year. What can I say…above all, she’s practical. But even my wife wouldn’t want a grocery store gift card for the holiday.
Depending on their circumstances and psychology, many people love to get supermarket gift cards. As long as the store has a location nearby, there will be no returns for wrong color or size. Many folks are struggling, so a supermarket gift card is as close to cash as you can get. Many employers who formerly gave out turkeys transitioned to turkey coupons. Not much of a transition from turkey coupons to supermarket gift cards.