Today's Gift Retailer
In spite of a stalled economy, real estate bust, spiraling gas and food prices, retailers say: "We're holding our own!"
By Kay Anderson, Research Director and Judi Fulbright, Lead Researcher -- Gifts and Dec, 6/1/2008 12:00:00 AM
"Holding our own," might be the watch words of Today's Gift Retailer, at least according to the respondents of Gifts & Decorative Accessories' exclusive 2008 survey. Looking back at 2007, nearly as many retailers said sales were down as said sales were up.
And as far as 2008 is concerned, nearly half of those responding to the survey think sales will hold steady with last year, while about one-fourth expect sales to be down and one-fourth anticipate sales will be up. So, with about 75 percent of retailers reporting that sales will either remain the same or increase — maybe things aren't as bad as the retail and financial pundits would have us think; at least not for independent retailing anyway.
However, while sales, like retailers, may be holding their own, the sale-close ratio — the percentage of customers who actually make a purchase after they enter the store — was down last year: a full 10 point decline from 2006. Looking at the medians, only six out of 10 shoppers entering a gift store last year made a purchase, compared with seven out of 10 in 2006.
So how are these retailers coping in such a sales environment? Here's what they tell us.
Spending for advertising and promotions has been holding steady at a median of 5 percent of sales since Gifts & Dec first began surveying retailers in 2000.
They're trying out new product categories, sometimes with success, sometimes pulling their toes out of the water, finding it chillier than they'd hoped. The box on page 36 gives a roundup of the categories that have been at the top of the audition list.
They're tinkering with the number of lines carried. Overall, gift specialists are streamlining their assortments and have reduced the number of lines in their stores by more than 10 percent. Most-often cut were holiday products, handcrafted products, fashion accents, housewares, jewelry, permanent florals, photo frames and social/business stationery.
They're rearranging price points. Opening price points went up for all five of the most-carried products — holiday, candles, jewelry, cards and photo frames. At the top end, retailers are adding higher-priced wall art, the single product showing a gain of more than $100 in highest price points. They're also trying some higher-priced ceramics and pottery, social and business stationery, desk and home office accessories, and housewares, all picking up gains of more than $10.
The Merchandise Mix
Products carried by more than 10 percent of retailers in 2007
| Price points | percent of retailers carrying | Number of lines carried | Price-points | ||
| Lowest | Best-selling medians | Highest | |||
| Median price points have been rounded to the nearest whole dollar; for example, a median price of $3.89 or $3.99 is listed as $4. Products carried by 10 percent or less of retailers includes scrapbook/memory products, promotional gifts, dance-related, apparel, furniture, lamps and custom frames. Source: Gifts & Decorative Accessories, Today's Gift Retailer, 2008 |
|||||
| Holiday (Christmas and other holiday-themes) | 94% | 6 | $3 | $20 | $100 |
| Candles/accessories | 89% | 3 | $4 | $16 | $29 |
| Personal care/aromatherapy | 80% | 3 | $5 | $15 | $30 |
| Jewelry | 74% | 4 | $6 | $25 | $100 |
| Greeting cards | 71% | 3 | $2 | $3 | $5 |
| Collectibles | 70% | 3 | $10 | $22 | $89 |
| Photo frames | 68% | 3 | $10 | $20 | $40 |
| Tabletop products | 65% | 4 | $8 | $25 | $76 |
| Ceramics/pottery | 63% | 3 | $10 | $30 | $100 |
| Wall art | 58% | 3 | $25 | $70 | $380 |
| Baby/infant products | 57% | 5 | $5 | $20 | $50 |
| Plush products | 56% | 3 | $5 | $15 | $33 |
| Glassware/crystal | 52% | 3 | $8 | $23 | $65 |
| Fashion accents | 50% | 3 | $10 | $30 | $60 |
| Gift books | 47% | 2 | $6 | $13 | $25 |
| Handcrafted products | 47% | 3 | $14 | $55 | $150 |
| Home textiles | 44% | 3 | $6 | $18 | $53 |
| Gourmet foods | 43% | 4 | $4 | $8 | $15 |
| CDs/music | 41% | 2 | $15 | $16 | $16 |
| Permanent florals | 41% | 2 | $7 | $16 | $65 |
| Toys/games/puzzles | 41% | 3 | $5 | $10 | $25 |
| Housewares | 36% | 3 | $5 | $30 | $75 |
| Desk/home office accessories | 33% | 2 | $10 | $15 | $50 |
| Licensed products | 33% | 2 | $7 | $15 | $30 |
| Pet products | 31% | 2 | $6 | $15 | $37 |
| Accent rugs | 29% | 2 | $29 | $63 | $118 |
| Gift baskets | 28% | 1 | $23 | $50 | $100 |
| Giftwrap | 27% | 2 | $2 | $3 | $5 |
| Social/business stationery | 27% | 2 | $5 | $10 | $33 |
| Writing instruments | 23% | 1 | $3 | $18 | $30 |
| Gourmet tools/cookware | 20% | 2 | $5 | $15 | $50 |
| Party products | 19% | 2 | $4 | $4 | $9 |
This is a very insightful article and even more interesting with the slide of the economy since it was written.
Lori Fratilla - 2008-10-11 16:34:00 EDT
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