Growing Number of Consumers Are Giving Gift Cards Instead of Books, Study Shows

More and more gift buyers are avoiding the decision-making process of book purchasing for the more convenient purchase of a bookstore gift card/certificate, according to recent research conducted by Ipsos BookTrends. If the gift certificate/card growth rate continues through 2005, and total consumer dollars continue to be relatively flat, "it is a good assumption that gift certificates/cards could account for 5 percent of consumer dollars or around $700 million," noted Michael Hoynes, ABA marketing officer. "No retailer, chain or independent, can ignore this consumer trend."

Since 1995, Ipsos consumer-panel data has shown a steady decline in the percentage of book purchases that were made for gifts; however, since 2001, the percentage of books purchased with gift certificates/cards has grown. In 1997, the percentage of books that consumers said they purchased as a gift for someone was 17.4 percent, and that figure had dropped to 15.4 percent in 2001 and 14.4 percent in 2002. A 1999 post-holiday season Gallup poll commissioned by ABA showed that 11 percent of adults who purchased books also purchased a gift certificate/card, a fact that prompted Ipsos to track the number of books purchased with a gift certificate/card, Hoynes reported.

The research showed that the gift certificate/card market was experiencing remarkable growth. Ipsos reported that in 2001 10.5 million books were purchased with a gift certificate/card, and in 2002 the number of books purchased with a gift certificate/card jumped 26.6 percent to 13.3 million. The data also indicated that 31 percent of the certificates/cards were redeemed in the first quarter; 22 percent in the second quarter; 24 percent in the third quarter; and 23 percent in the fourth.

"Let's assume one certificate or card for two books," Hoynes said. "This would mean 5.25 million certificates/cards were used in 2001 and 6.65 million certificates/cards were used in 2002. Now, using a certificate/card average number of $31, we can easily see that $162.8 million worth of gift certificates for 2001 and $206.2 million worth of gift certificates in 2002 were used to purchase books. That translates into about 1.25 percent of total consumer dollars in 2001 and 1.6 percent of total consumer dollars in 2002." If this trend continues, Hoynes said, gift certificates/cards will account for 5 percent of consumer dollars by the end of 2005.

The bottom line, he continued, is that the data clearly show that consumers looking to buy a book as a gift are turning more and more to gift certificates/cards for convenience, and, as such, bookstores that do not offer gift certificates/cards are going to lose out on a significant amount of sales.

More importantly, Hoynes added, stores that offer gift cards as opposed to paper certificates hold an even greater advantage because, unlike paper gift certificates that need to be kept under the front desk, inactive gift cards can be displayed and marketed all around the bookstore. "This takes care of consumer impulse, leading to incremental sales," he said. Not surprisingly, most retail outlets show at least a 15 - 20 percent increase in sales when offering gift cards.

For more details on gift cards and the Book Sense Gift Card program, click here [1].