Gift retailers should act now to offer an alternative to department stores: study

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Gift retailers should position themselves now to win a share of the money that UK consumers currently spend in department stores on presents – as those department stores prepare to close more outlets, a new report suggests.

Some 44.9% of UK consumers who bought a gift in a store bought it from a department store, according to the All Year Gifting in the UK 2019 report from data and analytics company GlobalData. It says that department stores are the second most popular physical location to buy a gift, with Debenhams the eighth most popular retailer to buy a gift from, and John Lewis tenth. The most popular retailers to buy a gift from, however, are Tesco and Amazon. 

GlobalData’s analysis suggests that as department stores such as Debenhams and House of Fraser cut back on store numbers – most recently, Debenhams has said it plans to close 22 stores next year as part of a CVA  retailers should position themselves to persuade shoppers to buy with them online after those stores close.

Emily Salter, retail analyst for GlobalData, said: “The popularity of department stores is bolstered by the presence of branded products across a number of sectors, more premium items and a perception of being an appropriate location to purchase gifts for special occasions. Department stores are the most popular for purchasing gifts for wedding and engagements as quality is the most important driver of retailer choice and gift recipients direct purchasers to department stores due to the presence of gift list services.”

If gift retailers don’t take action, suggests the report, the supermarkets and Amazon stand to benefit. Useful action to take would include focusing on quality for special occasions such as weddings and new baby gifts, and on low prices for occasions such as retirement, passing driving tests and promotions, says the study.  

“Supermarkets are in a good position to capture gifting spend as they already offer a wide range of products at low prices, but to entice more shoppers they must improve their reputation for good quality,” said Salter. “Amzon is set to grow in popularity due to the appeal of its often lower prices, vast product range and the convenience it offers, especially to Prime members.”

Image: InternetRetailing Media/Paul Skeldon

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