Think someone on your holiday gift list wants zit cream for Christmas? Ink cartridges for Hanukkah? Perhaps a little Cheez Whiz for Festivus? Looks like they may get such practical gifts, whether they want them or not.
After years of hyping expensive electronics or luxury items as the ultimate gift, this year, more and more marketers are pushing everyday products as useful gift solutions -- a message that is resonating with consumers. A recent survey from the National Retail Federation and BIGResearch reports that 36% of consumers say they will be shopping for more practical gifts.
Johnson & Johnson's Neutrogena brand -- a mass skincare line sold in supermarkets and drugstores -- has launched Neutrogena Holiday, a Web site that sells the company's cleansing, acne, anti-aging and body care products, most for less than $10, with free shipping and 25% discounts.
Staples is already pouring on the holiday promotions, and while pricey electronics -- including laptops and GPS devices -- are the most noticeable offering, there is plenty of push on the practicals: inks and extra CDs, for instance. At Costco, infant formula Enfamil is featured in its Holiday Gift Guide. (Food, in fact, is one of the few categories the NRF expects to see gain this year.)
And for the ultimate in practicality, bound to make your teen's face fall upon opening -- that is, if she isn't already crying about the zit cream? Socks. Among other delicacies and toiletries, Whole Foods Market is recommending a three-pack of Maggie's Organic Cotton Knee Socks as a "great gift for less than $20."
Part of that practicality stems from the up-close and personal relationship so many consumers are having with unemployment. "We've just completed a study among 2,000 households, and discovered that one out of every three reports that someone there has either lost their job or had to reduce their hours," says Lew Paine, VP of the GfK Group's retail and consumer sector. "They feel the need to be cautious and practical with every expenditure, and that feeling has spread through all demographics."
And it's also rippled its way into the gift list, he says: If the motto last year was less spending, the theme this year is more usefulness. "We anticipate there will be more sales of many utilitarian items as presents," he says.
Interestingly, however, experts are still conflicted about gift cards, which most predict will decline in sales this year. Retail Forward, for example, says only 57% of holiday shoppers will buy gift cards -- down from 63% last year. Part of the reason, Paine says, is that consumers know the cards are potentially wasteful, and that as many as 10% go unused.
But there are also clear signs that while consumers may be saying "nyet" now, the cards have become so widely accepted that they are a natural fallback: A new report from the International Council of Shopping Centers says that one reason consumers seem unfazed by retailers' claims that inventories will be low this year -- 81% say they aren't the least bit motivated to shop earlier by those reports of slimmer product pickings -- is that everyone is keeping the gift card in their back pocket as the default. ICSC, which surveyed 1,000 adults in partnership with Goldman Sachs, says 48% of holiday shoppers say that if they can't find a gift that inspires them, they will buy a gift card instead.
Paine thinks the gift-card issue can cut two ways. On one hand, he predicts stores like Target and Wal-Mart will sell more cards because, unlike grocery-store gift cards, they are a little more discreet. "Discounters do sell food, but these gift cards don't scream, 'Here, you look like you need a little help buying food this month' the way a supermarket-branded gift card might," he says.
"On the other hand, everyone is very aware that giving someone a gift card to a higher-end store -- one that doesn't sell household practicalities -- is a really nice present, because it relieves the recipient of any guilt. They can say, 'I can't buy groceries at this department store anyway -- guess I'll have to treat myself to that sweater.'"