Holiday over, it's back to the mall

Post-Christmas sales, gift cards extend retail push

December 26, 2005|By ANDREA K. WALKER | ANDREA K. WALKER,SUN REPORTER

After spending the holiday season buying gifts for others, Vera Dillard plans to indulge today in some shopping for herself.

She'll buy some suits to wear to church using a Hecht's gift card she received from co-workers. Then she'll stock up on bargain-priced Christmas items, such as cards from Hallmark, to use next year.

"It will be all for me," the federal government worker from Owings Mills said with a smile, as she finished her Christmas shopping at Owings Mills Mall last week. "As soon as you look, all the summer stuff will be out, and they'll be trying to get rid of the winter things. I'll be right there."

Christmas might be over, but the holiday shopping season is still in full gear for retailers, who count the full months of November and December when calculating holiday sales.

Today starts the post-Christmas shopping season. And retailers predict more shoppers than on a typical day after Christmas because it is also the official holiday and most people don't have to work.

Stores are expected to be packed with people returning clothes that didn't fit or gifts they didn't like. Today also begins the biggest month of gift-card redemption for retailers, a phenomenon that has helped extend the holiday shopping season well into January. Many retailers also begin slashing prices today to rid stores of excess inventory to make room for the next season's merchandise.

"If you think the madness of buying during the Christmas season was excessive, wait until after," said Daniel J. Howard, a professor and chairman of the department of marketing at the Cox School of Business at Southern Methodist University in Dallas.

The week after Christmas has become an important addition to the holiday sales season in recent years, mainly because of the increase in gift-card giving. Gifts cards will make up 16 percent to 18 percent of all holiday gifts, according to the International Council of Shopping Centers -- double their percentage a few years ago. About 20 percent of those are cashed the week after Christmas and about 60 percent by the end of January. Retailers don't count gift-card sales until they've been redeemed.

The final tally on how retailers fared this holiday season could be thrown off by people waiting to redeem gift cards. Research by Bernstein Investment Research and Management found that in a worst-case scenario, gift-card sales could reduce overall retail sales in December by 1 percent but that the sales would show up in January once the cards were redeemed. Some gift cards lose value over time, prompting holders to use them not long after they get the cards.

Recognizing the significance of gift-card sales, retailers are marketing them more aggressively. Many retailers sell their cards at drugstores, convenience stores and supermarkets.

This holiday, Target sold gift cards shaped like candy canes as well as some with blinking lights and others that played music. Wal-Mart and Visa allow people to personalize gift cards with digital photos. Best Buy put them in CD cases, according to retail analysts at Bain & Company, a Boston-based consulting company. More than 75,000 stores had gift cards on display this holiday season, 50 times more than five years ago.

"The holiday season doesn't really end on Dec. 25 but lasts more through the end of January," said Michael Niemira, chief economist and lead researcher for the International Council of Shopping Centers. "Gift cards have a lot to do with that."

Retailers also like the day after Christmas because many people who come to return and exchange gifts, or redeem a gift card, often buy something else.

"Part of the answer is to get them into the store, and there is an added benefit that they will probably spend more," Niemira said.

Local malls and such stores as Hecht's, J.C. Penney and Macy's will extend their hours today, but most will go back to pre-holiday hours the remainder of the week.

"It will be a very heavy shopping day for us, that's not a question," said Marty Heires, a Wal-Mart spokesman.

Also fueling heavier traffic today will be the late start of Hanukkah. The eight-day Jewish Festival of Lights began last night, and many people exchange gifts this week. The seven-day Kwanzaa observance, a celebration of African-American culture, also begins today. People might also be out shopping for outfits for this weekend's New Year's Eve festivities.

But for some consumers, shopping today reminds them of Black Friday, the day after Thanksgiving that is known for its mad rush of shoppers hunting for the latest deals.

And they'd rather stay home.

"It's just like the day after Thanksgiving," said Ann McFarland as she shopped with her daughter at Owings Mills Mall recently. "It's something you just don't do."

andrea.walker@baltsun.com

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