Gift cards will fuel the 12 days after Christmas
Gift cards have come a long way from their previously held titles of "most lukewarm reception on Christmas morning" and “most likely to be given by a distant relative.” Gift card spending is set to boom this holiday season, prompting retailer questions about what kind of purchasing patterns to expect, and when recipients will redeem them.
Nearly one-third of all consumers plan to buy gift cards online as part of their holiday shopping, according to BOXpoll surveys results just a few weeks ago.
This round of questions revealed that Millennials drive gift card spending across nearly all product categories, representing more than one-third (37%) of dollars typically spent. The notoriously hard-to-buy-for teenagers of the early 2000’s now have their own families, careers and packed calendars, but their preference for gift cards has remained steadfast.
In addition to those planning to buy gift cards this holiday season, a sizable portion of shoppers may be forced to buy gift cards out of last-minute necessity.
Our recent BOXpoll surveys around holiday shopping show U.S. consumers have completed just 13% of all planned shopping (while those who’ve started shopping are more than a third of the way there). Nearly one in five of all adults (16%) expect to finish their online shopping the week before Christmas.
If inventory shortages and shipping delays play out as expected, those waiting until the last minute are likely to rely on gift cards to finish their shopping.
In fact, when we asked about Plan B strategies for out-of-stock items, one in four shoppers (25%) reported that they are most willing to buy a gift card, instead of looking for comparable products or waiting for a potential restock.
Amidst the perfect storm for holiday gift card spending, we asked consumers for details around their plans to buy—and spend—those prepaid dollars.
- General merchandise store brands like Amazon, Walmart and Target rank number one for both gift card popularity and spending, with nearly three in four (74%) shoppers saying they’ve purchased a general merchandise store gift card, spending an average of $56.90. Hardly surprising, given the market share these retailers hold.
- Apparel and footwear come in second ($51.05), with electronics following at a close third place ($50.60). These categories’ high rankings likely come from higher average product price.
- Food and beverage gift cards ranked fourth ($50.60). While much of this spending will likely benefit chain restaurants—premium DTC food & beverage brands should take note of an opportunity to reach a different cohort of consumers: gift card buyers.
- General-purpose gift cards like AMEX, Visa and Vanilla round out the top five ($45.65). The sub-$50 average could be a result of activation fees added by third party gift card providers. Almost two-thirds (64%) of consumers report buying these gift cards.
- 47% of consumers do not buy gift cards for pet supplies. That jumped out at us, given that one in five U.S. households adopted a pet during the pandemic, and whose first experiences buying pet supplies were likely online.
- Millennials were significantly more generous with gift card buys than any other age group, spending an average of $30.95 across nearly all product categories.
- Baby Boomers won the Scrooge award, spending an average of $14.52. And yes, thank-you notes are still mandatory.
- The only category in which Millennials did not lead was general-purpose gift cards. Gen Xers ($32.35) took first place, and Millennials ($32.23) closely followed.
- Young adults (18+) are positioned to come out on top this holiday season, with more than half (52%) of all consumers buying gift cards for this group. This group will have significant buying power post-holidays.
- Grandparents’ post-holiday purchases won’t likely be fueled by gift cards. Less than one-third (31%) of respondents plan to buy them for grandparents.
- Most people buying gift cards for any given age group plan to spend the same amount as they did last year.
- Out of those buying for young children, one in five (22%) plan to spend more than last year. This could be a response to a severe toy shortage this holiday season.
- Most consumers who receive a gift card (58%) plan to spend it either within days or a few weeks after the holiday. This group will be well-positioned to take advantage of post-holiday sales, allowing retailers to enjoy the 12 days after Christmas.
- Nearly one in three (30%) consumers spend gift cards months after the holidays—if they remember them at all.
- Responses for both giving and getting gift cards are not much different. Most consumers feel either the same or more favorably about giving or receiving gift cards as they did last year.
- Only 12% of consumers felt less favorable about giving gift cards than they did last year, while only 9% felt less favorable about receiving gift cards than they did last year.
BOXpoll™ by Pitney Bowes, a weekly consumer survey on current events, culture, and ecommerce logistics. Conducted by Pitney Bowes with Morning Consult //2094 US consumers surveyed October-November 2021.© Copyright Pitney Bowes Inc.