By Colin Munro, Managing Director Of Miconex
If there has been one positive, lasting effect of the pandemic in the USA it is this, the increased understanding of the need to shop small and support our local retailers. There are over 33 million small businesses in the USA, employing over 61 million Americans. And as well as providing employment, these small businesses are the heart of our communities, contributing to the vibrancy and uniqueness of our downtowns.
In our August 2023 research in the USA, a massive 96% of Americans said they’re keen to support local businesses this holiday season with 98% saying supporting local retailers helps to keep them open. Not only that, but 68% said that shopping local offers a better experience and 43% said it’s better for the environment. From keeping doors open to finding unique products, shopping local offers a win-win on every level.
Another change we’re seeing post pandemic and amidst the rising cost of living, are changing attitudes to gifting. In our research, we found a preference from Americans for finding gifts that can be used in a practical way, and that offer the recipient choice of how and where to spend. There’s a real desire to avoid wasteful gifting by giving a present that our loved ones actually want and need.
Gift cards, in particular, are seen as a ‘useful’ gift with 98% planning to buy at least one gift card this holiday season. 93% prefer giving a gift card to cash with 73% saying this is because it encourages the recipient to treat themselves.
Added to changing attitudes to gifting, the reality is that finding the perfect gift isn’t always easy with 78% of Americans worrying about finding the perfect gift. For many, gift cards reduce the pressure and worry that givers can feel when choosing a present, particularly for those hard to buy for friends and family!
And when it comes to buying holiday gifts, our research found that 77% of Americans plan to spend the same this holiday season, typically up to $1,000. 13% will spend less and 9.1% will spend more. The need to purchase gifts for family and friends was given as a reason for Christmas spending not changing, or increasing.
Building on changing attitudes to gifting, gift cards are a Christmas present that Americans want to receive too, with 90% saying they would like to receive a multi-business gift card that can be spent at more than one store or business and 95% preferring gift cards that can be used in various sectors, such as retail, hospitality and leisure.
We also looked at preferences for digital gift cards or physical gift cards. For most Americans right now, physical gift cards win out over digital, with 69% saying they would prefer to receive a physical gift card over digital. Many also prefer to give physical gift cards as gifts, as they’re able to hand over a tangible gift that they can wrap, if they choose.
As for what happens when those gift cards are spent with retailers, the results from our research were interesting. 90% of people said they spend over the value of the gift card in store with 24% spending 75-100% more. The main reason for this is the fact that most people see the gift card as ‘free money’, so they’re willing to pay more on top.
Participants talked about the mental calculation that goes on when spending gift cards, totting up how much they have ‘saved’. 44% say having a gift card enables them to trade up to something better and 23% say spending a gift card is exciting so they spend more.
After a difficult few years for businesses, it is heartening to see that support for local retailers is so strong in the USA. As retailers gear up for the key Christmas trading period, local shopping will keep tills ringing, people employed, and secure the future of our American downtowns.
About the author
An authority on leveraging technology for economic development worldwide, Colin Munro founded Miconex in 2012, establishing the first city-wide gift card programme in the UK in 2015 and overseeing the firm’s expansion into North America and Ireland. Leading an international team and focused on delivering value for clients across 200 + places worldwide, Colin has a wealth of experience in how place-centred loyalty and local currencies can be designed to deliver value for consumers, businesses and places. A former restaurateur with an early career in digital marketing, Colin is a UK Government Department for Business and Trade Export Champion for Scotland.
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