Revising Your Holiday Gift-Giving Strategy

Last week, MediaPost's Marketing Daily published an article entitled, "Report: Gift Cards Are The New Fruitcake." That is to say, gift cards are the new "classic" Christmas present that nobody wants to receive.

According to research firm TowerGroup, store gift card spending is expected to decrease 7% for 2009; an October Consumer Reports survey revealed that only 15% of consumers actually want gift cards.

The MediaPost article and a video by Consumer Reports offer some hypotheses for the reasons behind the gift card's fall from favor:

1. Consumers want to spend money on more practical items (i.e. food and gasoline), not on the non-necessities sold by the typical gift card retailer.


2. Consumers are slow to spend their gift cards. According to Consumer Reports, 25% of consumers who received a gift card in 2008 have not yet spent the gift card.


3. 65% of consumers spend more than the face value of the gift card they receive, meaning that in order to use their own gift, they must spend money.


4. Retailers are maintaining smaller inventories this year; thus, by the time a consumer visits the store to spend a gift card (i.e. after the holidays), the items they might have wanted may likely be sold out already.

Adding to the "fruitcakey-ness" of gift cards this Christmas season is the loudness with which retailers have been peddling their gift cards. It seems that a person can no longer turn on the television or set foot in a store without a bombardment of advertisements touting gift cards as the "one-size-fits-all gift" or the "gift that won't be returned" or the "gift that people really want."

But if folks want to give something better than fruitcake to their loved ones this Christmas, they might be advised to avoid the gift cards and resort to the good, old-fashioned holiday gift strategy:

Giving actual, physical objects as Christmas presents.

When a person gives a physical item - be it a toy, a sweater, cologne, or a toaster oven - it shows that he took the time to consider the recipient's likes and dislikes; he spent time browsing the store aisles or catalog pages (or actually making a gift, like everyone did in the olden days); he spent time choosing a thoughtful and meaningful gift.

Instead of trying to persuade consumers to buy gift cards for their loved ones this year, marketers ought to help consumers pick out considerate and desirable gifts.

Social media seems like one natural venue for this. Help consumers use their friends' profile information (with permission, of course) to determine likes, dislikes, and wants. Design quizzes that enable users to report on their likes and interests, and then output suggested gift items. Enable users to create "Christmas wish lists" to post to their profiles. Create "secret societies" of friends that can share ideas for what to give to a certain someone.

In-store displays could also give helpful hints to gift-givers. What if stores showed lists of this year's top-selling items for different interest categories: "for the musician," "for the gamer," "for the animal lover," "for the skater," "for the outsdoorsman," "for the fashionista," "for the bookworm," etc.?

This Christmas, consumers may be returning to the notion of giving thoughtful gifts because they care, instead of giving "spend-as-you-like" gifts because a gift is expected. And if consumers are thinking more about the gifts they give, marketers should be thinking more about how to help those gift-givers give meaningful gifts.