Magazine Article | November 1, 2004

Holiday Spending: In The Cards And Online

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With Black Friday on the horizon, make sure you're stocked up on stored value cards and Web server space.

Integrated Solutions For Retailers, November 2004
Matt Pillar

We don't know yet what the final dollar amount for 2004 U.S. online spending will be, but based on America's $56 billion Web shopping spree in 2003, we know it will be a substantial figure (albeit one that pales in comparison to brick-and-mortar retail sales). It looks like the near 40% growth we saw in online retail sales in 2003 will be better than matched, and that's keeping low consumer confidence in mind.

According to the Census Bureau, e-commerce sales were $31.2 billion through the second quarter of 2004, up from $24.8 billion at the midway point last year. This bodes well for fourth quarter online holiday spending. For perspective, overall retail sales were $1.6 trillion at the midway point last year; they hit $1.75 trillion after two quarters in 2004. At this rate, online sales will approach 2% of overall retail sales this year, nearly doubling since 2001.

What's the point of all this statistic spewing? The point is that I hope you're not approaching the 2004 holidays without an e-commerce effort, regardless of your size or niche. The fastest-growing retail sales channel has only just begun to gain momentum, and as retail technology and operations professionals, it's your responsibility to see to it that your company rides the tide.

Sales Of Gift Cards Surge
Web sales aren't the only good way to up your holiday revenue. Gift cards are low-overhead, high-payback, hot holiday sellers, and retailers have done an excellent job of convincing the American public there's nothing impersonal about giving the gift of choice. As a matter of fact, gift cards have become so popular that many large retailers are selling more of them than any other single item on their shelves.

Here are more stats that ought to convince you to champion gift cards as your next project. Close to 100 million adults buy gift cards each year, accounting for more than 45% of the adult population. Active gift card buyers purchase more than 5 per year, and 56% of gift card recipients spend more money than the amount originally allocated on the cards.

If consumer acceptance of gift cards isn't enough to convince you, consider their place in corporate gift giving. Gift and spending card solution provider ValueLink (Englewood, CO) says 40% of corporations are using gift cards as employee incentives, second only to cash.

With the holidays fast approaching, I hope your gift cards are stocked and your Web site is running at its peak. If not, make your New Year's resolution to build and market both in time for the 2005 holidays.

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