Creating a Big Bang
Nov 1, 2007 12:00 PM, By Mike Janssen
Upbeat outlook for gift cards
Shoppers can expect to encounter the usual complement of carts, kiosks and specialty retailers this year, though the holidays have become less central to these businesses than in previous years. Holiday sales once made up about 80 percent of business for specialty retailers, but that has fallen closer to 60 percent, says Patricia Norins, publisher of Specialty Retail Report.
Norins says specialty retailers may feel less pinched by threats of competition and a soft economy. Because carts and kiosks sell unique products unavailable elsewhere in malls, they are less pressured to cut prices.
“It doesn't matter whether it's $2 or $5, if it's not sold anywhere else in the mall,” Norins says. Only about half of the merchants in a recent Specialty Retail focus group said they plan to discount their wares.
In addition, many of their products sell for under $100, which boosts their appeal to impulse buyers and customers looking for stocking stuffers. “If you look at the last 20 years of the industry, when the economy doesn't do as well, carts and kiosks actually can do better,” says Norins.
Mall executives say they expect specialty retail sales to remain steady this year. Developers Diversified expects an increase in sales. Its property owners are requesting vendors of antique puzzles, board games, men's accessories and crystal candleholders in particular.
The firm also aims to capitalize on parking space by leasing to tree and wreath vendors. Hickory Farms will move a small building into a lot at one of the firm's centers.
Along with specialty retail, gift cards are expected to hold steady or even grow in popularity. The NRF study, for example, found that more than half of consumers that responded said they would like to receive a gift card as a holiday present.
A gift card was once seen as the refuge of the last-minute shopper, Lecklikner says, but “now it doesn't have the same stigma.” Lecklikner expects Developers Diversified properties will continue selling more gift cards this season.
In Arizona, Westcor's Decovich foresees an 8 percent increase in sales of the Macerich subsidiary's Visa-based gift cards. At Kierland Commons in Phoenix, customers can even pull up to the curb across from the center's management office and buy gift cards from their cars.
Several executives remain optimistic about holiday sales despite the forecasts of modest growth. Amid financial worries, holidays can become even more important, says Forest City's Lisy. “People want to put some joy into their lives,” she says, “and they don't want to give up the special gift-giving season.”
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