Christmas 2006 Gift Spending Expected to Rise 9.1 Percent Over Last Year

New survey of gift givers points to positive mood in gift shoppers reports Unity Marketing

Stevens, PA November 7, 2006 — Christmas 2006 will turn out to be a particularly strong holiday season for the nation's retailers. Based upon Unity Marketing's latest survey of over 700 gift givers (average age 43 years and household income $61,700), gifters are expected to spend a total of $949 on Christmas gifts this year, up 9.1 percent from the average of $870 spent last year.

"Throughout the 2006 year, consumers have been generous with their gift spending. We don't expect that to change during the fourth quarter, especially now that gasoline prices have dropped and the stock market is going through the roof," explains Pam Danziger, president of Unity Marketing and author of the new book Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience.

More Specialty Store Shopping as Fewer Shoppers Turn to Discounters

Early indications are people will turn to more specialty stores for their gift shopping this year, rather than to the discount department stores that have dominated shopping in the recent past. Danziger explains, "With consumers feeling more flush this season, the pull of cheap prices offered by the discounters will be less compelling. Shoppers are likely to turn to stores where they will enjoy a more shopper-friendly environment."

"Discounters will still get plenty of action this year, but significantly fewer shoppers plan on shopping at discount destinations this year than did last year. Some 69 percent of gifters surveyed say they plan on shopping at discounters this year, down from 78 percent who planned to shop discount in 2005.

The 2006 sales year may mark the turning point in Wal-Mart's stranglehold on retailing in America. Their competitive edge is slipping as shoppers decide they want more from the time they spend shopping than just cheap prices. They want an engaging and entertaining shopping experience that Wal-Mart simply doesn't provide." Danziger says.

Positive Shoppers' Mood Points to Strong Holiday Shopping Season

Contributing to the strong holiday gifting season this year is a tendency for shoppers to start their Christmas shopping earlier in the season. About one-third of shoppers have already started their holiday gift shopping and have spent on average just under $300 so far on Christmas 2006 gifts. This is 16 percent more than they had spent through the same period last year.

As for gifters' expectations on spending, there is a slightly more positive feeling among gifters this year than last. Some 58 percent say they will spend about the same this Christmas, while 18 percent expect to spend more. Among those 18 percent who are budgeting more for Christmas gift purchases, the average amount they expect to increase their spending 12.5 percent , a very positive sign for the Christmas gift giving season in 2006.

Popular Gift Choices This Year

Based upon the gift choices people are expected to make this holiday season, these are the categories that will see positive growth:

• Gift certificates will be especially strong: This season more shoppers will opt for retailers' gift cards as their primary gift. Book and record stores, traditional department stores and clothing and fashion stores are likely to find strong consumer interest in gift certificates, as will discount department stores.

• Gifts of experience will be in demand: The percentage of gifters who expect to give a gift of experience, such as a dining, entertainment or beauty/spa experience, has risen significantly this year. Nearly one-fourth of gifters (26 percent) say they will present a gift of experience, up from only 19 percent who said the same last year.

• Giftables and other 'little luxuries' will be popular: Another popular gift category and one that is growing in terms of anticipated purchases are giftables and other 'little luxuries' that people will favor as gifts. Giftables, like flowers and candles, consumables or 'foodie' gifts and personal care items are all highly indulgent gifts that will be favored this year because they give the recipient the maximum amount of luxury pleasure at a reasonable price. So bath and body gifts, luxury soaps, candles, home fragrances, take-home spa kits, perfumes, gourmet food baskets, wine and other good smelling and tasting stuff will fly off the shelves. Gifts that truly indulge the recipient in a sensual way will be a hit.

About Gift Tracker Survey

Unity Marketing, on the forefront of market research on the gifting market, conducts a quarterly gift tracking study to measure the pulse of the gift consumer in a longitudinal survey of 600-800 gift buying consumers. Every quarter Unity tracks what gifts they bought during the past quarter, what gift occasions and holidays stimulated those purchases, how much they spent per holiday and occasion, where they bought gifts, the store and product brands they relied upon for gifts and their expectations for future purchases of gifts.

The Gift Tracker survey is a subscription service which is customized to include subscribers' specific gift products, their brands and key competitor brands in order to measure the effectiveness of marketers' and retailers' success in the gifting market. The next Gift Tracker survey will be fielded early January 2007 to track 4Q2006 gift purchases.

For more information on Gift Tracker, click here