Traditionally, the holiday selling season covered the two months of November and December, ending with a final flurry of week-after-Christmas sales and returns.
But the growing popularity of gift cards — which now account for 10 percent to 15 percent of holiday expenditures — has extended the period into January, when as much as 30 percent to 40 percent of redemptions occur. According to data compiled by the International Council of Shopping Centers (ICSC), based here, that translates into between $15 billion and $20 billion in holiday sales for the first month of the year. The trend has prompted the trade group to begin regarding the holiday selling season as a three-month event, which it has dubbed the “new” holiday period.
Bolstering the new view are the redemption patterns of mall-based gift cards and/or gift certificates. While 29 percent of all redemptions are made the week after Christmas, fully 64.5 percent occur in January, ICSC said. In February, the percentage of redemptions falls to just 6.5 percent.
Gift cards have grown in popularity due to their convenience for the gift buyer and their desirability by the gift recipient, ISCS surmised. Since the first retail gift card with a magnetic strip was introduced by the Mobil Oil Company in 1995, the gift card market has exploded, with full-year sales likely to hit $80 billion for 2007, the association said.
Separately, the ICSC reportd that the traditional holiday season of November through December has become an increasingly critical period for consumer electronics and major appliance retailers, accounting for a growing percentage of total annual sales over the past 10 years — from about 21 percent in 1996 to nearly 24 percent in 2006.
The trend runs counter to the overall retail marketplace, which has seen the importance of holiday sales diminish over the past two decades. According to ICSC, sales of general merchandise for the November through December period accounted for 22 percent of total annual sales, compared to more than 25 percent in 1992.
ICSC projected modest chain-store sales growth for the 2007 holiday season, with revenue up 2.5 percent for the November to December period and up 2.9 percent for the November to January period. This compares to prior-year holiday gains of 2.9 percent and 3.2 percent, respectively. In contrast, the U.S. Department of Commerce predicted a 4.3 percent increase in sales of general merchandise, apparel, furniture and other store (GAFO) from November through December 2007, and a 4.6 percent gain for the three months ending Jan. 31, 2008.
ICSC is a 50-year-old trade association for the shopping center industry with 70,000 members in 92 countries.
The January Effect On Holiday Sales
‘New’ Holiday Season Spending
2007 Forecast november-January Period
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