Trends in the Gift Market
by Wendy J. Woudstra
The gifts and decorative accessories market reached sales of $35.97 billion in 1996, up from $21.5 billion in 1991, and while not all books are suitable for the gift market, many publishers are looking to this area for book sales that, while generally require a higher discount, avoid the problem of returns.If you're one of those publishers, you should find the following information, gleaned from a new study* of the gift and accessories market, useful.
During the last five years, gifts have become a vital part of the retail product mix of an expanding body of stores, as well as in innovative new retailing alternatives such as electronic and TV retailing. The gift industry is shifting to a more year-round business with today's gift retailer being less dependent upon once-a-year Christmas sales than in the past.
Compared to 1991 when gift retailers reported that the cost of goods sold was the budget category that increased the most, gift retailers in 1996 are challenged by rising payroll expenses. Along with the rising minimum wage that has impacted many retailers, today's gift store is open one more day per week than in 1991.
"The gift industry is characterized by a wonderful feeling about its future,'' said Phyllis Sweed, editor of Gifts & Decorative Accessories magazine. "For the past several years retailers have enjoyed a healthy economy, which means more disposable income for consumers to spend on gifts and decorative accessories. "Along with a solid economy, the gift industry has benefited from three dominant trends -- Cocooning, Collecting and Cross-Merchandising,'' she explained.
Dominant Trend No. 1 -- Cocooning
The trend toward cocooning is having a profound impact on the gift and decorative accessories market. Consumers are retreating into their homes to spend "quality'' time with their family and friends. As the importance of the home as a place of leisure and entertaining grows, the consumer naturally turns to buying products that enhance the home environment.
Dominant Trend No. 2 -- Collecting
Aging baby boomers are now reaching the prime years for collecting, ages 45-to-64, when people naturally look back to the past. This period is strongly associated with gathering special items that have a personal meaning to the individual. Collecting is enthusiastically embraced by 31.3 million Americans. It's no wonder that the largest percentage of gift retailers surveyed named collectibles as the fastest growing category in their store.
Dominant Trend No. 3 -- Cross-Merchandising
This trend is bringing many new retailers into the gift and decorative accessories marketplace, which means new buyers for wholesalers and new competition for gift retail operations.
These new entries include restaurateurs from the down-home Cracker Barrel chain to the hip Planet Hollywood and Hard-Rock Cafe. Sales of gift and accessory items in these restaurants are contributing as much as 33-to-40% to annual revenues.
Cross-merchandising is the trend behind the phenomenal increase in the number of retailer outlets that sell gifts. In 1993 the U.S. Bureau of the Census reported 34,100 gift outlets. Lacking updated government statistics, and independent source reports the number of gift outlets at 69,000 in 1996 -- a doubling of the number of retail outlets selling gifts.
Gift retailers are cross-merchandising too. They are adding categories that they never have carried before to enhance their sales potential.
It makes them more competitive with other stores by offering their clientele more and more diverse products, including area rugs, throws, table linens, permanent florals, scrapbooking accessories, holiday decorations, fireplace accessories, and garden accessories.
On the Web
Giftware News Online provides up-to-date trends information, great book listings, and new product releases. Retailers can also browse through management articles to help run your business better, find out about trade shows for businesses, learn about manufacturers and more.
Collectible News will help keep you up to date in the world of collectibles, as well as keep you in touch with manufacturers, clubs, and events.
*The study, entitled "Gift Retailing: $35.9 Billion at Retail and Growing", is available for $1500 from Unity Marketing, 206 E. Church Street, Stevens, Pa. 17578; telephone 717/336-1600; fax 717/336-1601.
by Wendy Woudstra