Unity Marketing Update
Election Results Bring Boost to Holiday Gift-Giving Mood (December, 2004)
Before the election, consumers were expected to increase their holiday gift spending by a modest 4.5 percent. But a survey conducted by Unity Marketing post election points to an even more positive outlook. The re-election of President Bush will be very good for gift shopping this year. Consumers overall are likely to increase their holiday gift spending by 5.6 percent, from $648 last year to $678 this year.
Shoppers’ psychology got a boost once the campaign was over. Consumers feel better than they did a month ago thanks to the closure of knowing who our president is for the next four years.
That will translate into more generous gift-giving this holiday season, especially among consumers Unity identifies as ‘serious’ gifters (i.e. one who spent $250 or more through October on gifts). That highly-involved gift shopper, who comprises about 60 percent of the total gifting market, will spend 6.3 percent more this year, up from $843 in 2003 to $896 this year. The ‘serious’ gifter is most likely to be a woman, aged 25-to-54 years old, with a household income averaging over $50,000.
Entertainment Tops Gifters’ Lists, but Store Gift Certificates Will See Greatest Boost in Giving
Shoppers are going to turn first to entertainment and/or recreational goods as gifts this year. Hot items will include electronic entertainment equipment (i.e. hardware) and entertainment media (i.e. software), as well as photographic equipment and back-to-basic toys.
Next on shoppers’ gift lists will be clothing, fashion accessories and jewelry and watches. Shoppers this year will be drawn to more luxurious costume and ‘faux’ jewelry that makes a strong fashion statement for under $100.
An increasingly popular gifting alternative this year will be store gift certificates. Last year about 53 percent of gifters gave a store gift certificate, while 63 percent this year say they are very or somewhat likely to choose this gift. Retailers are beginning to get smart about this most profitable gift offering and are combining token gift items like chocolates with a gift card, thus vastly increasing the gifting pleasure on Christmas morning.
A traditionally popular gift category that may get less attention this year is home furnishings. While 48 percent of gifters chose a home gift last year, only 40 percent say they are likely to give something for the home this Christmas. With people fighting to eliminate household clutter, many gift recipients will get greater satisfaction from a gift that they can enjoy, like gourmet food, wine, or candy or something more personal such as perfumes and bath products.
Only beginning to rise on the gift-givers’ radar screen are gifts of experience, such as a day at the spa, a fine dining experience, a ticket to the opera or a favorite jazz club. Nearly one-third of the ‘serious’ gifters plan on making an experiential gift this Christmas.
New Gifting Report, 2004 Update Available
The results of this year’s Christmas holiday gifting survey updates Unity Marketing’s Gifting Report, 2004 Update: The Who, What, Where, How Much and Why of Gift Giving and Shopping. This consumer insight study of gifting combines qualitative and quantitative research among gift givers. It reveals gift giving incidence and spending by holiday and occasion, including seven major gifting holidays and 12 gifting occasions, such as birthdays, anniversaries, weddings, friendship. The key attributes of a good gift are presented, as are the types of stores where gifters prefer to shop. How people choose across the range of gifting options is explored. Finally the personalities of three different types of gift givers with different gifting motivations are explored. For more information about the study, use this link http://www.unitymarketingonline.com/reports2/gifting/gifting.html
Halloween is the Second Most Important Holiday in the Decorations Market (October, 2004)
While Halloween claims primeval roots, Americans observe Halloween quite differently from other holidays. Without formal sanction from the government or religious groups, Halloween has become the second most popular decorating holiday, making what used to be primarily a children’s holiday equally appealing to adults.
Halloween has become the first true people’s holiday and its traditions have spread grass-roots fashion throughout the culture. This year the majority of American households will decorate their homes for Halloween, according to the Seasonal Decorations Market Report, 2004: The Who, What, Where, How Much, and Why of Holiday Home Decorating, a new research study from Unity Marketing, spending more than $1 billion. And they will decorate both inside and outside.
Along with natural decorations, like pumpkins and cornstalks for the front porch, more decorators are hanging Halloween lights, Christmas-fashion, around the eaves and mounting lighted, even moving, wire sculptures in the yard. Inside the decorating focus is on tabletop centerpieces and decorative candy bowls, Halloween-themed candles and accessories and paper and party decorations.
"Getting Booed,” New trick-or-treat tradition involves
the whole family.
The way we celebrate holidays, in particular a grass-roots holiday like Halloween, reflects trends of the time. Today consumers are emerging like butterflies from their protective ‘cocoons,’ and look to reconnect with the outside world. Connecting has become our dominant trend and it includes comes a desire to make new connections with neighbors. Halloween celebrations, like trick-or-treating and getting booed, are a way for us to connect.
Spooky Halloween decorations have the edge.
Unity Marketing’s study of the decorations market, Seasonal Decorations Market Report, 2004: The Who, What, Where, How Much, and Why of Holiday Home Decorating, is based on focus group research with ‘passionate’ holiday decorators and a survey of 1,000 consumers who bought holiday decorations in the past year. It reveals decorating practices and purchase behavior of decorations consumers and provides details about which holidays they decorate their homes and what kind of decorations are used, how much they spend and where they buy decorations.
Retail sales and growth statistics are presented for 12 types of indoor decorations, such as paper and party decorations, tabletop decorations, candles as decorations, Christmas ornaments and tree decorations, etc.; and six outdoor decorations, including outdoor lights, flags and banners, and flowers, plants and wreaths for outdoor display. Also included are retail sales and growth for 11 holiday and party celebrations. Attitudes about why people decorate their homes are included, as well as profiles of five different personalities of decorators and their preferences.
Finally brand awareness and usage is provided for 22 leading decorations brands including profiles of the market share leaders, including Hallmark, American Greetings/Carlton Cards and Martha Stewart Everyday. For more information visit www.unitymarketingonline.com .
What Every Marketer Needs to Know about the Luxury Consumer (September, 2004)
The luxury market is gaining much attention these days as sales are on the upswing among leading international luxury brands. New research conducted by Unity Marketing provides insights to help marketers develop strategies for luxury consumers. Today we tend to equate the luxury market with international badge-value brands, but affluent consumers are just as likely to shop with the ‘masses’ at Wal-Mart or Target as they are to frequent Madison Avenue boutiques with the ‘classes.’
One of the most important things about the luxury consumer is that he or she is not that different from anybody else. They just happen to have a little more money.” A new Unity Marketing study, Luxury Market Report 2004 - Who Buys Luxury, What They Buy, Why They Buy, based on focus group research and a quantitative survey of 500 consumers (average income $152,000) who purchased one or more home luxuries, personal luxuries (fashion or jewelry), or experiential luxuries (travel, fine dining or spa/beauty services) uncovered key insights into the new luxury market.
Luxury consumer is driven experientially; it’s not about
Consumers are democratic in their approach to luxury; American’s
value individuality over exclusivity
Exclusivity, in and of itself, brings little luxury value to today’s democratically-attuned luxury consumer. Still, luxury consumers yearn for “specialness” in their experience. Rather than exclusivity, the American luxury consumer values the ability to express a personal point of view, an attitude and one’s uniqueness. The challenge for luxury marketers is to make their customers feel special, but never let it morph into class snobbishness.
Luxury goods are better; Quality counts
Luxury consumers are bargain shoppers always looking for
a good deal
The luxury consumer is highly invested in their lifestyle;
They risk little
Luxury consumers exhibit differences of degree, not of kind
Fall is Around the Corner — Home Decorating Season Kicks into High Gear (September, 2004)
As nature prepares her annual fall celebration of color, it signals to two-thirds of Americans that it’s time to join in the decorating celebration, according to new research from Unity Marketing. Changing leaves, cooler air and the return of football signal the start of the year’s biggest holiday decorating season. From now through Christmas, consumers will spend about $10 billion buying new decorations to brighten family holiday celebrations.
Decorating for Halloween has become a favorite fall tradition with decorating behavior as predictable as clockwork, according to the research. People display pumpkins, gourds and corn stalks right after the kids return to school, then mix in Halloween-themed ghosts and goblins in October. Once trick-or-treat night passes, they return the spooky decorations to the attic and spruce up the wilting natural decorations on the porch with more mums, wreaths and other harvest-home naturals. Traditionally, the Sunday after Thanksgiving the harvest decorations are thrown on the mulch pile and the Christmas lights, trees, centerpieces, dinnerware and all the other holiday trimmings come out to shine.
Key findings about the fall holiday decorating market, from Unity Marketing’s Seasonal Decorations Market Report, 2004: The Who, What, Where, How Much, and Why of Holiday Home Decorating, are based on focus group research with ‘passionate’ holiday decorators and a survey of 1,000 consumers who bought holiday decorations in the past year.
Three favorite decorating holidays fall from October-December
Halloween decorating combines both outside and inside decorations;
more decorators focus Thanksgiving indoors
Typical household spends about $40 each on Halloween and
Halloween decorators will slightly favor ‘spooky’ decorations
Predictions for Christmas 2004 Holiday Decorating Season (August, 2004)
Holiday and seasonal decorating is a passion for 85 percent of U.S. households with Christmas taking the lead as the single most important decorating holiday. The market for holiday and party decorations topped $14.1 billion in 2003. Christmas generates more than half of all industry sales, $7.6 billion, according to new research from Unity Marketing.
Today there is a strong home design and decorating shift toward simplicity. People are getting rid of the clutter in their homes and being more selective about purchasing new décor items. Holiday and seasonal decorations are the exception to the new ‘anti-clutter’ decorating rule. People today are expressing a growing desire to use seasonal decorations to create a mood to celebrate different holidays. This represents a bright marketing opportunity for companies that bring innovation and creativity to enhance people’s holiday celebrations.
To learn more about consumers’ passion for decorations and how marketers and retailers can maximize their opportunities to sell to this market, Unity Marketing conducted a survey among 1,000 U.S. households that decorate their home for different holidays. Included in the survey were questions about their decorating plans for the coming Christmas 2004 season. Highlights follow.
Majority of households will buy new Christmas decorations
for the 2004 season.
Decorating gets you in the mood to celebrate, while favorite
decorations bring back memories.
While decorating looks into the future, it is also nostalgic. Bringing out decorations from yesteryear rekindles fond memories. Nearly 70 percent of decorators agree, “I love to bring out my favorite decorations from years gone by; they are like old ‘friends’ and bring back wonderful memories.”
Christmas 2004 decorating shopping to peak in October/November.
Christmas decorations shoppers will turn first to discount
Candles are top inside decoration for Christmas 2004.
Outside Christmas lights will brighten this year’s celebrations.
Traditional Christmas Red and Green is favorite decorating
Unity Marketing’s new study, Holiday Decorating Report, 2004: The Who, What, Where, How Much, and Why of Holiday and Seasonal Home Decorating, studies the decorating and purchase behavior of consumers. It reveals details about which holidays they decorate their homes and what kind of decorations they use. It also provides detail data about purchases for 11 major decorating holidays, as well as party decorating. Attitudes about why people decorate for their home are also included. For more information about the study visit Unity Marketing Online.
Luxury Brand Connects Corporate Strategy with Consumer Psychology - Brand Loyalty is the Scorecard to Measure Success (July, 2004)
In today’s hyper-emotional marketplace, where marketers use every trick in the book to push consumer’s hot buttons and stimulate an emotional reaction, brands have become the medium and the message. Through brand name recognition, logotypes, imagery, and tag lines, marketers hope to forge lasting emotional connections with customers, making the brand connect corporate strategy and consumer psychology.
In the luxury products category, brands take on an even more complex and demanding role in linking with the consumer. Not enough to simply create brand name recognition, luxury marketers must stimulate fantasy, aspiration and desire through their brands. The success or failure of corporate strategy to connect with the luxury consumer is measured in brand loyalty.
Brand loyalty rates high in few luxury categories
While conventional wisdom holds that the status of the brand is the primary motivator of luxury purchases, Unity Marketing’s latest research among luxury consumers disproves this myth. Only in a handful of luxury categories does the brand play a major role in purchase motivation among the affluent top 20 percent of U.S. households with incomes of $75,000 and above.
Based upon an index that ranks the relative importance of brand loyalty in purchasing luxuries, the categories ranking highest include:
Brand loyalty is highest in categories that are mechanical in nature (e.g. gears, movements, wheels and motion) or highly personal (e.g. cosmetics, beauty products and spa/beauty treatments services).
High brand loyalty categories are characterized by intense competition among marketers with rewards going to those brands that forge the strongest connection with the luxury consumer. Low brand loyalty categories, such as jewelry (index of 40), or home decorating fabrics, window or wall coverings (59 index), signify luxury categories where luxury branding strategies could pay off big time because the competitive playing field is virtually open.
Luxury brands must perform
Luxury marketers must be attuned to the concept of performance when planning branding strategies, as it relates to how the product delivers or performs experientially. It’s through the performance of the brand, in tangible and intangible emotional ways, that the company delivers luxury satisfaction to the consumer.
The concept of luxury brand performance must be freed from a mechanistic definition and seen in the expansive light of experiential marketing. Doesn’t luxury jewelry ‘perform’ as the feeling one gets from wearing a beautiful piece of jewelry, of being more beautiful, more sophisticated, more stylish? Doesn’t home fashion such as luxury fabrics, rugs, tabletop accessories perform in the home as an expression of one’s good taste or impart a peaceful, serene home environment?
The concept of luxury brand performance connects both the intrinsic definitions of luxury (i.e. quality performance, design performance, uniqueness performance) with the experiential — how the brand makes the consumer feel and the way they experience luxury. Luxury marketers not only need to design and produce the ‘best of the best’ product, they need to make sure that their products also deliver the emotional, experiential satisfactions that the luxury consumer desires. It is through performance that ‘old luxury,’ encompassing the thing, is transformed into ‘new luxury’ that delivers the experience, the emotion to the consumer.
Luxury brands and the role they play in luxury purchasing are explored in the Luxury Market Report, 2004: Who Buys Luxury, What They Buy, Why They Buy, the result of both qualitative and quantitative research among luxury consumers. For more information, visit this link, or call Pam Danziger at 717-336-1600; e-mail: firstname.lastname@example.org .
Father's Day Brings Gifts for Most Dads (June, 2004)
A majority of Americans (55 percent) celebrate Father’s Day with a gift, according to new research about gift giving from Unity Marketing. Father’s Day is the fourth most important gift holiday, after Christmas, Mother’s Day, and Valentine’s Day. The typical gift-giver spends $80 on Father’s Day, based on a survey among 950 ‘serious’ gift-givers who spent over $250 throughout the year on gifts.
While holidays represent predictable sales opportunities, the day-in-day-out gifting occasions, i.e. birthdays, anniversaries, weddings, graduations, hostess presents, etc., throughout the year represent about half of gifters’ total gift budget. Every time a shopper crosses the retail threshold, it represents a sales opportunity for a gift along with other purchases. Savvy retailers maximize each gifting opportunity.
Retailers’ Gifting Strategy Hinges on Guided Discovery
An understanding of how gift buyers select gifts can help retailers prepare questions and probes for their salespeople to use to help their customers ‘discover’ the best gift choice. The key decision points in the gifting process include:
Unity Marketing’s new study, Gifting Report: The Who, What, Where, How Much and Why of Gift Giving & Shopping, presents an experiential research perspective of the gifting market. Combining qualitative and quantitative research, it reveals gift giving incidence and spending throughout the year, including seven major gifting holidays and 12 gifting occasions (e.g. birthdays, anniversary, wedding, friendship, etc.). The key attributes of a good gift are presented, as are the types of stores gifters prefer and why. How people choose across the range of gifting options is explored, including gift certificates and cash, home furnishings, entertainment, apparel, gifts of experience, etc. Finally the personalities of three types of gift givers with different gift giving and buying motivations are explored.
For more information about the study visit Unity Marketing Online.
New Luxury Paradigm Shifts to Experience (May, 2004)
Old Luxury is about the ‘thing;’ New Luxury is the ‘experience’ The phrase ‘new luxury’ is tossed around a lot of late, often synonymous with ‘masstige,’ i.e. mass prestige, as it applies to affordable, new generation luxury brands like Starbucks, Victoria’s Secret and Panera.
However, the concept of mass-marketed luxury doesn’t go far enough to explain the paradigm shift that is taking place in the luxury market today. The real shift in the luxury market is a change in the way consumers define luxury. ‘Old luxury’ is defined by the attributes, qualities and features of the product, and usually refers to heritage brands that charge a premium, such as Mercedes, Christian Dior, and Cartier. ‘New luxury’ defines the category from the point-of-view of the consumer.
Based on new research conducted by Unity Marketing, luxury consumers focus on the experience of luxury embodied in the goods and services they buy, not in ownership or possession itself. So ‘new luxury’ is about the experience of luxury from the consumers’ perspective, while ‘old luxury’ remains focused on the traditional, product-based definition of luxury.
Two ways to define luxury: intrinsically and consumer-centrically
In the old luxury world view, luxury is defined as the special qualities, features and attributes intrinsic to a product. In most categories, whether fashion, automobiles, furniture, linens, jewelry, or tabletop, specific product features constitute luxury. For cars it’s handling and ride, leather seats and wood detailing; in jewelry, platinum and real gemstones; in linens, 500 thread-count sheets, Egyptian cotton, etc. Here the product expresses or incorporates features that confer the ‘best of the best’ status. Many old luxury companies stop here, focusing their resources only on creating the ultimate product.
New luxury companies recognize that the intrinsic definition of luxury does not reflect the changes taking place in the luxury market today. New luxury companies recognize the need to incorporate consumer experience and perception into the luxury branding equation. They begin by offering the ‘best of the best’ quality, but go that extra step to deliver not just a great thing, but a wonderful experience to the customer. Luxury companies like Tiffany, Godiva Chocolatier, Saks Fifth Avenue, KitchenAid, Sub-Zero are attuned to this new experiential luxury paradigm.
In recent focus groups new luxury was described as:
When we talk about luxury from the consumers’ experiential perspective, the brand becomes irrelevant. What matters is how the brand delivers the luxury experience it promises. In other words, ‘old luxury’ is about the thing (i.e. a noun), while ‘new luxury’ is about the consumer experience (i.e. a verb.).
Luxury brands and the role they play in luxury purchasing is the subject of investigation in Unity Marketing’s 1Q2004 Luxury Tracking Study, based on a survey of 650 households with incomes over $75,000 (one-third over $150,000). Panelists reported purchasing luxury goods and services over the most recent two months, attitudinal and expectation data about their households and the economy. Unity Marketing publishes its Luxury Tracking Study quarterly. For more information, follow this link or call Pam Danziger at 717-336-1600.
The New Casual Luxury (April, 2004)
Market research usually brings some surprises. I got a jolt when reviewing the latest annual luxury consumer survey this past December with the dramatic increase in luxury tabletop, dinnerware, flatware and servingware purchases. Luxury tabletop purchase incidence rose from an anemic 8 percent in 2002 to a vigorous 20 percent in 2003. No other product category in the annual luxury survey posted such a dramatic upswing.
What accounts for the new vibrancy in luxury tabletop this year? First we have to account for the shift in timing of the two years' surveys. The 2002 survey was conducted in August 2002, not a particular strong time for tabletop sales, while the 2003 survey was taken in December 2003, a time of entertaining and family gatherings that stimulate tabletop sales. Offsetting the surveys' time shift is the fact that we boosted male participation in the 2003 survey to 50 percent of the sample, up from about 30 percent in 2002. Yet despite these variations, the simple fact is more luxury consumers bought tabletop in 2003 than during the year before.
A shopping trip at my local Pier 1 store in February, the dead of our Pennsylvania winter, gave me a clue to what may be behind renewed interest in buying dinnerware. In the front of the store was a casual dining room table set with Pier 1's new spring-fling tabletop collection. Like a much needed burst of warmth and sunshine, they were showing casual dinnerware, fabric floral centerpieces, coordinating linens, butterfly napkin rings, and colorful stemware, as a wonderfully fun and funky springtime dining experience.
A quick glance at the prices on the bottom of the plates was the dealmaker, however. Priced a la carte each piece was under $10. For maybe $100-$200 you could set a really creative, designer-look party table. This definitely isn't serious tabletop to be relegated to the china cupboard. It is designed to celebrate the moment and strictly for the here-and-now.
This is dinnerware to enjoy once, twice, maybe three times, then toss out or recycle to your college-age niece or local charity. It is fun, frivolous, and totally luxury the equivalent of paper plates and cups for the luxury set.
Many in the tabletop industry would take me to task for calling Pier 1's collection of easy-living, fashion-forward, throwaway dinnerware 'luxury.' After all, the industry views luxury tabletop as made of fine bone china, hand painted, sold in jewelry or department stores and priced $500 and above per place setting. But the industry has it all mixed up. They need to define their luxury based upon the consumers' perspective, not some stuffy, old world ideal of luxury dining. Luxury isn't about the 'thing,' today the 'new' luxury is about the experience, the consumers' expectations and how well it lives up to that.
For some small segment of the consumer population luxury tabletop is about buying museum pieces that cost a small fortune but for many other luxury consumers, luxury is about fashion, fun and a casual lifestyle. These new luxury consumers luxuriate in change and breaking the mold.
The tabletop industry desperately needs to take itself, and its products, less seriously. What they need to do is break it up a little, literally and figuratively. A clever, attention-grabbing way to get less serious is to give the consumers' permission to toss out the old stuff cluttering up the cabinets and cupboards and to buy new dinnerware as fashion and fun.
Demographics that Define the Luxury Market (April 2004)
Confusion reins when describing the luxury market, which is variously defined as the top two to five percent of earners, or the 10 percent of income. Others define affluence beginning at $1 million in investible assets.
In practice, what marketers mean by the 'luxury market' is largely subjective. While Cartier and Bailey Banks & Biddle jewelers both target the luxury market, each defines it differently. Cartier curries the super-affluent $150,000 plus tier; Bailey Banks & Biddle, with 110 locations nationwide, defines the luxury market as mall shoppers of more moderate incomes. A single woman, making $75,000 and living in Des Moines, is a prospect for a right-hand diamond ring at Bailey Banks & Biddle, but is not likely to visit Cartier.
Seeking a standard definition of the luxury market, Unity Marketing turned to the Bureau of Labor Statistics' (BLS) consumer expenditure survey. The BLS classifies the nation's 111 million households into equal-sized quintiles based on household income. The lower cut-off for households in the upper fifth quintile, about $75,000, provides a reliable definition of the luxury market, i.e. households with income within the upper quintile of the BLS's model. The average income for households in the upper quintile is $121,367.
Of the 111 million U.S. households, approximately 27.9 million, about one-quarter, have an income of $75,000 and above. At $100,000 and above, there are approximately 15.7 million households, or 14 percent of households.
A more precise segmentation can be based upon these broad perimeters:
Top 20 Percent Make More, Spend More and Save More
Affluent households have after-tax income nearly two-and-one-half times that of typical households, but their spending is less than twice the average. While luxury consumers could spend more, they are highly motivated to protect and preserve their luxury standard of living. As a result, they have more money left over for savings and investing.
Their spending also lags behind their feeling of financial well-being. While a near majority of luxury consumers felt better off financially at the end of 2003 that in the previous year, they are not increasing their spending commensurate with their renewed feelings of well-being. In Unity Marketing's latest survey, only 30 percent of luxury consumers say they are spending more on luxury in 2003, compared with the previous year; 21 percent say they are spending less than before.
The luxury consumer is not about to put their lifestyle at risk. Rather than spend it all, they are more likely to spend a little on luxuries they desire and save or invest the rest. As opposed to viewing the luxury consumer as a spendthrift, marketers need to see them as they are: cautious, risk adverse, and protective of their financial resources. That is one reason why these luxury consumers who can pay full price hesitate to do so. It makes good financial sense to seek out bargains and the best deal.
The Luxury Market is Where the Action is Now and Through 2010
If "demographics is destiny," nowhere is that more true than in the luxury market. From now until 2010, the number of affluent households and their influence will continue to grow. The rising tide of affluence is driven by the 78 million baby-boomers who range in age from 40 to 58 years. This is the age of empty-nesting, when consumers are earning the most money in their lives, but no longer have to stretch their paychecks across the demands of a growing family. Empty-nesters have more discretionary income for 'luxuries' that they might have denied themselves when their children were younger.
Gifting is an Overlooked Year-Round Retailing Opportunity - and Department Stores Stand to Gain the Most from Implementing a Gifting Strategy (March 2004)
In 2002 the gifting market, that is the buying and giving of gifts for family and friends, represented a $253 billion total market or about 10 percent of the consumer economy. While the annual year-end holiday gifting season receives the lion's share of retailer attention when it comes to the gifting market, the reality is that gifting represents a significant marketing opportunity throughout the whole year. In fact, the period from January to October accounts for 60 percent of the typical gifter's $2,062 annual gifting budget, according to the latest research on the gifting market from Unity Marketing.
Retailers will gain much by focusing their gifting strategy not just on the holiday rush, but on everyday gifting occasions, such as birthdays, weddings, anniversaries, new baby, housewarming, just-because, romance and the myriad of other reasons why people buy gifts.
Retailers who implement a year round gifting strategy will get a double payback for their efforts. Unlike other consumer marketing which targets the self-purchaser/consumer - in other words, a target market of one - gifting is that rare marketing opportunity for retailers and marketers to touch two target markets directly and personally - the gift buyer and the gift recipient. Thus gifting becomes more powerful than word-of-mouth advertising and does sampling one better in influencing future shopping behavior.
Retailers that aren't tapping the full relationship potential of gift marketing are losing half its power. And retailers that aren't maximizing their gifting sales opportunities throughout the year, not just at Christmas, are losing even more.
The new gifting research identified one retailer where shoppers already have a propensity to buy gifts and one that desperately needs the double marketing-whammy that gifting represents - the traditional department store. While the place where most gifters shop for and buy gifts most often is the discount department stores, including warehouse clubs, dollars stores, and discount mass merchants, traditional department stores are the next most widely favored stores. One-third of gift shoppers regularly turn to traditional department stores for gifts, while almost half occasionally shop for gifts in department stores. Thus department stores outperform dedicated specialty gift stores in the gifting business. Gift shoppers turn more often to department stores than dedicated gift stores because they meet more of the gift shoppers' criteria.
The most important factor for gift shoppers is a store that offers attractive prices. It's no surprise then that discount department stores rank first, but department stores with their emphasis on special sales and promotions are no slackers when it comes to giving the customers a good value.
Next most important attribute for a good gift store is where the shopper can find what they want easily. Often times the best stores to shop for gifts are also stores where the giver shops frequently. They know the store layout, so they can get to the section they want and find something fast.
Finally, having a wide selection of gifts, convenience and the ease of returns are rated as very important to the majority of gift shoppers in their choice of stores.
When gift shopping, it's the experience that counts - and the experience most gift shoppers want is price, selection, convenience. They want to find that special gift at the right price within the context of stores that are convenient. For gift shoppers traditional department stores are second only to discount department stores in delivering the gift shopping experience they desire.
Gifting, as this survey suggests, is an important marketing opportunity for department stores. Department store strategists need to think in new ways about their stores and the consumers' needs. They should transform the department store into a gifting store, that is a store that delivers the ultimate gift shopping experience. Department stores already meet many of the chief attributes that consumers look for in gift shopping: product quality, convenience, wide product selection, and when they have sales, price. Working from a position of strength in the gifting market, traditional department stores will find significant rewards in focusing their marketing and merchandising strategy toward the gifting business. They will be rewarded by building a loyal gift shopping customer who will return again and again for their year-round gift giving needs, as well as creating the potential for the giver's gift recipients to also shop the store for their future gifting needs.
Valentine's Day is Third Most Gifted Holiday (February, 2004)
St. Valentine's Day, February 14, will be celebrated with cards, gifts and other remembrances. Originally a pagan Roman festival, it was adapted by the Christian church and linked to St. Valentine, a third century martyr. Today this traditional lovers' holiday has been transformed into a "gifting" holiday, celebrated not just between paramours but among friends, family and loved ones.
In new research, Unity Marketing found that seventy percent of gift-givers honor Valentine's Day by giving a present. Those who celebrate spend on average $126, buying 2.4 gifts. Out of the seven major gifting holidays, Valentines Day is the third most widely gifted holiday, after Christmas (96 percent) and Mother's Day (74 percent).
For retailers and marketers Valentine's Day is a welcome mid-winter sales boost. But the year-round gift marketing opportunity is often overlooked. Gifting holidays account for just over half of the gifters" $2,062 budgets, leaving the rest available throughout the year for occasion-driven gift giving — birthdays, weddings, anniversaries, housewarming and new babies.
Gifting represents a rare exponential marketing opportunity where you can touch two target markets directly: the gift buyer and the recipient. For retailers, gifting has the advantages and promotional marketing power of sampling and word-of-mouth, but it magnifies and intensifies that power. Retailers need a gifting strategy that takes advantage of its full relationship potential, not just for holidays, but throughout the year as well.
Key findings about Valentine's Day gift-giving, based on a survey of 950 gift givers who spent over $250 throughout the year, not just at Christmas, include:
This new study, Gifting Report: The Who, What, Where, How Much and Why of Gift Giving & Shopping, presents an experiential research perspective of the gifting market. Combining qualitative and quantitative research, it reveals gift giving incidence and spending throughout the whole year, including seven major gifting holidays and 12 gifting occasions (e.g. birthdays, anniversary, wedding, friendship, etc.). The key attributes of a good gift are presented, as are the types of stores where gifters prefer to shop and why. How people choose across the wide range of gifting options is explored, including gift certificates and cash, home furnishings, entertainment, apparel, gifts of experience, etc. Finally the personalities of three types of gift givers with different gift giving and buying motivations are explored. For more information about the study, click here .
Gifts: It’s No Longer the Gifts Business (i.e. noun) It’s Gifting (i.e. verb) (January, 2004)
What is the gift industry and what is it’s primary business? Is the gift industry about creating, designing, manufacturing and marketing gift items, or is it the business of delivering a wonderfully unique, emotional gift-giving ("gifting") experience to the customer? These are essential questions for retailers and marketers in the gift industry. The answers will determine the industry’s future.
Gifting represents a rare exponential marketing opportunity where you can touch two target markets directly — the gift buyer and the recipient. For retailers, gifting has all the advantages and the promotional marketing power of sampling and word-of-mouth, but it magnifies and intensifies that power through the unique emotional connection between the giver and the recipient.
Retailers that aren’t tapping the full relationship potential of gift marketing are losing half its power. And retailers that aren’t maximizing their gifting sales opportunities throughout the year, not just at Christmas, are losing even more.
Here are key findings from the new gifting research study among gift givers that spent more than $250 between January and October 2003 on gifts. By knowing more about the gifting consumer, retailers and marketers can maximize their sales potential in the gifting business.
Gift shopping is an important motivator for consumers to shop and gift shopping takes place THROUGHOUT the year, not just during the last two-or-three months. Retailers and marketers need to develop and implement gifting strategies for the entire year, not just at holiday time. They will be rewarded by not only serving the gifting needs of the shopper, but the potential they have to touch and influence the gift recipient to return to the store for their own gifting needs.
About Pam Danziger & Unity Marketing
Found in 1992, Unity Marketing (www.unitymarketingonline.com) is a marketing research and consulting firm that helps companies apply the concept of emotional marketing to corporate branding and marketing initiatives. Using its "why people buy" research strategy, Pam Danziger, company founder, president and author of Why People Buy Things They Don't Need (Ithaca, NY: Paramount Market Publishing, 2002), uncovers the motivations, desires and emotional needs that drive consumers to buy. This approach turns consumer insights into actionable marketing and brand strategies and gives executives "future vision" to plan the direction of their business. Unity produces market research studies that are essential business planning tools for executives competing in the luxury market, jewelry, art, home furnishing, gifts and collectibles, toys, personal care/cosmetics industries among others. Unity also publishes the Luxury Business and Gifts & Collectibles Business newsletters. Today Pam is at work on her next book, Let Them Eat Cake: Marketing Luxury to the Masses (as well as the Classes).
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