Macy's Decision to Eliminate Gift Wrap Services Is Penny-Wise and Pound-Foolish

Department Store's Decision May Cut Costs, But Move The Venerable Chain One Step Closer To Being Indistinguishable Fom The Mass-Market Discount Stores

 

The white-glove image of the traditional department store -- with sales clerks readily avaiable to assist, no-questions-asked returns, and full-service gift wrap -- has become a thing of the past.  Another signal of this retreat comes as Macy's announced it is eliminating its gift-wrap department in most of its stores as a cost-saving move.

"Macy's decision to cut out their gift wrap services is penny-wise, but pound-foolish," says Pam Danziger, president of Unity Marketing and author of the new Gifting Report 2010: The Ultimate Guide to the Consumer Gift-Giving Market.  "In a desktop calculation, we determined that $1 out of every $10 spent in a GAFO-type of store is for a gift.  This is a share of consumer spending that these stores can ill-afford to ignore. Three-fourths of the 1,680 gift shoppers surveyed ranked customer service as very or somewhat important to their decision about where to shop for a gift."

"Cutting gift wrap services brings Macy's, and other department stores like it, one step closer to becoming equivalent to discounters like Target and Wal-Mart.  And in a race to the cost-cutting bottom such as that, the discounters will win; they have already mastered the art of providing popular gift items at affordable prices."

"Traditional department stores like Macy's need to distinguish their brand by recapturing the customer service experience and delivering it to their customers.  Customers will pay more for quality service that extends to walking out the door with a perfectly wrapped gift, ready for giving.  The store that makes the gifting process the easiest and most enjoyable is the one that will capture that $1 out of $10 that consumers have to spend on a gift."

Introducting the new gifting report....

The  Gifting Report 2010: The Ultimate Guide to the Consumer Gift-Giving Market

• What Gifts People Give
• What Holidays and Occasions They Gift
• Where They Shop for Gifts
• How Much They Spend
• Opportunities for Marketers to Target the Gifting Market

The gifting market -- defined as items or experiences purchased to give as a gift -- represents roughly $1 out of every $10 spent at the GAFO-type of store.  Buying and shopping for gifts is a big business.  

What's more, making a gift purchase is an important motivator for retail shopping throughout the year, but most especially in the Christmas holiday gift buying season which officially kicks off the Friday after Thanksgiving.  Called 'Black Friday' this day is so named because it marks the period when retailers go from being in the red (i.e., posting a loss on the books) to being in the black (i.e., turning a profit).

This report is a totally new look at the gift-giving practices and shopping behaviors of Americans

The current report is a totally new look at the gift-giving practices and shopping behaviors of Americans.  Building upon previous research conducted on the gifting market, this study presents an expanded view of consumers' gift buying and giving behavior based upon a survey of 1,680 gift buyers.  Intended for marketers and retailers that tap the gift market, this report presents:

• Gifting behavior by holiday and occasion: Key characteristics of the gifting market, such as on what holidays and occasions consumers buy gifts, how many people they buy gifts for and their relationship with the gift recipient, such as spouse, child, close family member, etc. and how much they spend. This report also reveals what range of products people choose for gifts, what drives their selection of particular gifts and what drives their selection of stores to shop for gifts.
• Demographics of the gifting market: How many households buy gifts, how much they spend by key demographics, and the key different demographic segments within the gifts market (e.g. HHI, age, size, composition, education, etc.)
• Gifts market buying behavior: What are the primary characteristics of the consumers' buying behavior related to different gifts? What makes a good gift? What attributes and qualities make gifters want to buy? Where do they shop for these items; how do they decide to purchase one item over another? What is the role of brand in gifting buying behavior? What is the purchase incidence and spending on key categories of gifts 
• Psychographic profile and segmentation of the gifting market: The psychographic profile of gift consumers reveals their different drives and motivations in purchasing gifts. What factors are more or less important in driving gift purchasing decisions? How can gifts marketers and retailers better understand the hearts and minds of their consumers and use that insight to capture a greater share of the consumers' gifting budget? In essence we reveal "why people buy gifts."