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NEW YORK -- A study by Deloitte & Touche USA found that consumers are feeling bullish about this year's upcoming holiday spending, with a majority of them planning on purchasing gift cards as gifts for family and friends this year.
"Overall spending is expected to be up for many key categories, supporting our forecast of 7 percent growth in sales this holiday season," said Pat Conroy, vice chairman and national managing principal of Deloitte's Consumer Business practice.
Two thirds, or 66 percent, of consumers surveyed plan to buy gift cards this year, making them the top gift purchase of the holiday season. Last year showed a similar number of consumers planning on buying cards, however shoppers plan to purchase more cards this year. For holiday season 2006, consumers plan to buy 4.6 cards, an increase from the 3.9 cards bought last holiday season.
Even though gift cards top out on gift buying lists, more consumers want to receive a gift card than give one, the survey found. Of those surveyed, 35 percent would prefer a gift card over merchandise, while 22 percent noted that they don't like to give gift cards because they seem too impersonal. The study suggests that this presents an opportunity for retailers to market gift cards to that 22 percent who remain skeptical of the cards.
Gift cards do come as a double-edged sword for retailers, however. "As a result of buying gift cards last year, 50 percent of consumers spent less time shopping during the holidays and 41 percent bought fewer spontaneous, spur-of-the-moment items," said Conroy.
To overcome this, Conroy suggests: "Successful retailers can benefit from gift-card and product-bundling, incentives for shoppers to buy additional products while in the store, and other strategies to up-sell and cross-sell with gift cards."
Time and convenience is another factor that will impact holiday shopping this year. "Time pressures and a need for convenience have contributed to a long term trend of fewer shopping trips and fewer stores visited, creating an opportunity for stores with a broad array of merchandise that can be one-stop shops," said Conroy. "Other critical factors this holiday season will include delivering a better customer experience, converting shoppers into buyers and increasing share of wallet."