Oct 6, 2009

‘Big-Box’ Retailers Spice Up Gift Cards For Holiday SeasonBy Veronica DagherOnline.WSJ.com

New York — Some “big-box” retailers may be spicing up an otherwise plain-vanilla product this holiday season to lure in value-conscious consumers – the gift card.

Certain of these retailers – whose stores are physically large and usually part of a chain – are rolling out gift cards that play on social networking trends and webcam technology as a way to help them stand out from mounting competition.

Their creativity may be driven, in part, by necessity. A third of retailers said they expect sales during Christmas to decline 5% to 25% this year despite recent strength in the stock market, according to a Hay Group seasonal hiring survey.

Although the size of the gift card business is hard to track, analysts say it is growing and becoming an increasingly important part of retailer’s sales. Catherine Fox-Simpson, tax partner in the retail and consumer product practice of BDO Seidman, expects gift card sales to increase this holiday season as consumers seek practical gifts. She estimates the gift card business to be upwards of $25 billion a year.

Consumers’ emphasis on value will help drive sales of gift cards that have an added value or special selling point above and beyond the standard gift card, she said.

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