A surge in gift cards and vouchers is transforming the shopping landscape on Boxing Day, traditionally one of the biggest retail days in Australia. As retailers compete with the rising popularity of promotional events like Black Friday, the increasing use of gift cards is bringing more customers into stores. According to Gerry Harvey, the executive chairman of electronics and whitegoods retailer Harvey Norman, gift cards and vouchers now represent approximately one-fifth of all transactions during this post-Christmas period.
Harvey noted that consumers often perceive gift cards as “free money,” especially when presented as well-wrapped gifts. While specific sales figures for Boxing Day were not disclosed, he indicated a potential improvement in sales of between 2 and 3 per cent compared to the previous year. The Australian Retailers Association reported that Boxing Day sales reached A$1.6 billion, reflecting a 4 per cent increase from the previous year.
Shifts in Retail Dynamics
The significance of Boxing Day sales has diminished for many retailers, overshadowed by the lucrative sales events in November, which generate nearly double the revenue. Australians spent about A$6.8 billion during the four-day November sales event. Fleur Brown, chief industry affairs officer at the Australian Retailers Association, explained that Boxing Day primarily serves as a clearance event, aiming to discount slower-moving products to make way for new stock.
The rise in gift card usage can be linked to a heightened quest for value among consumers facing financial pressures. Brown highlighted that a more substantial portion of online shopping has also contributed to the popularity of gift cards as holiday presents.
The gift card industry in Australia is projected to grow significantly, with Blackhawk Network estimating its value will reach US$10.1 billion by 2028, up from US$4.8 billion in 2020. This growth reflects changing consumer behavior and preferences in gift-giving.
Trending Products Post-Christmas
Data from Shopify, an e-commerce technology platform, revealed interesting trends following Christmas. Pet beds topped the list of trending items, surging by 126 per cent compared to the days leading up to Christmas. Other popular items included portable gazebos and canopies for sun protection, which increased by 105 per cent. Car seats for babies and toddlers, as well as prams, experienced growth between 60 and 80 per cent during the same period.
According to Shaun Broughton, managing director for Shopify in Australasia, the Pacific, and Japan, retailers are increasingly preparing for promotions earlier in the year and maintaining these offers for extended periods. This shift aligns with the evolving landscape of retail, where consumer preferences and shopping habits continue to change.
As Boxing Day adapts to these new dynamics, the reliance on gift cards and the changing nature of promotional events highlight the ongoing evolution of the retail sector in Australia.
