gift market
factpack
1
contents
1.
Overview
Page 3
4.
2.
What consumers think about buying gifts at Christmas
Page 3
4.1. How many subscribers give gift subscriptions?
Page 6
3.
The gifting market
Page 4
4.2. What are the characteristics of gift subscription donors?
Page 7
Page 4
4.3. Number of gift subscriptions held
Page 9
3.1.1. Growing population driving volume demand
Page 4
4.4. Source of gift subscriptions
Page 10
3.1.2. Diversity in household composition & ageing
population benefits gifting networks
Page 4
4.5. Renewal intentions
Page 10
4.6. Future gift intentions
Page 12
3.1.3. More high spenders and fewer low spenders
Page 5
5.
Barriers to gift subscriptions
Page 14
3.1.4. Online altering the sales pattern for
home shopping retailers
Page 5
6.
Conclusion
Page 14
7.
Sources
Page 15
3.1. Key factors affecting the gifting market
3.2. Segmentation
2
Page 5
The potential for gift subscriptions
Page 6
7.1. Mintel: Christmas Shopping Habits
Page 15
7.2. PPA: The Loyalty Challenge; How
consumer magazine subscriptions work
Page 15
1.
overview
2.
what customers think about
buying gifts at Christmas
The gift market is large - and growing. Consumers find buying gifts at
Christmas stressful – many leaving it until the last moment. How frustrating
that all this effort results only in forgotten, unworn and unused presents.
Source: PPA/Royal Mail/YouGov Nov 2006
If you find Christmas shopping stressful, don’t worry – you are not alone!
Almost all consumers surveyed in PPA/Royal Mail’s YouGov poll said they
would like to receive a subscription as a gift – and yet subscribers remain
largely unaware of gift subscriptions, and how and where to buy them.
UK gift givers spent over 650 m hours on soon-to-be-forgotten gifts
of Christmas but only one in ten can remember last year’s Christmas
present. One third even admitted to wearing something they didn’t
even like, just to please the person who gave it to them. And yet…
By approaching existing subscribers at the right time with a relevant offer,
publishers can successfully increase their subscription base.
…88% of people would welcome a magazine subscription as a Christmas gift
But don’t take our word for it – read the evidence from a number of pieces
of research. And there’s a convincing case study courtesy of BBC Magazine’s
Gardener’s World Magazine, which shows how it can be done.
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Furthermore, a staggering 73% of existing subscribers neither give or
receive a gift magazine subscription.
3.
the gifting market
Of course, subscriptions have competition when it comes to the Christmas
gifting market. They are up against a range of potential presents available in
stores, online and through catalogues. But this is a large, and growing, market.
Mintel puts the size of the overall gift market at £20bn – and growing: retail
sales in the UK in the fourth quarter saw an increase of 4.1% on last year
(source: Verdict, UK Retail Trends 2007)
And although we’ve focused on Christmas gifting, there are special events
throughout the year – from Valentine’s Day to Father’s Day – giving a regular
opportunity to promote your gift subscriptions programme.
3.1. Key factors affecting the gifting market
Source: Mintel, Christmas Shopping Habits, February 2007
3.1.1. Growing population driving volume demand
Demand in the economy has been stimulated by growth in population
numbers and the forecast trend is for a broadly similar rate of growth in
the next five years as was experienced in the last five years. However,
variations between age bands highlight contrasting changes of:
• Declining number of children
• Increased numbers of 15-24-year-olds
• Rising number of over-55s.
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3.1.2. Diversity in household composition & ageing population
benefits gifting networks
Increasingly complex household formation shaped by marital breakdown,
children by different partners and remarriage can contribute to individuals
having more complex and extended gifting networks, but this may be
mitigated by hostile relationships with former partners, estranged
partners and children abandoned by one or other parent.
Greater longevity also contributes to creating extended family networks,
thereby increasing the gifting network of many older people. Ensuring older
people stay in touch with what younger relatives want is never easy, but
electronic gift lists posted on websites help. Making purchasing of gift cards
easier, such as the Post Office’s Gift card shop offering cards for a variety
of retailers, provides ready access to a favourite standby for older people
unsure of what to buy.
3.1.3. More high spenders and fewer low spenders
With a third of the sample spending more, and just under a quarter
spending less than last year, the balance of responses is consistent with
the industry enjoying a better Christmas in 2006. The finding that there
were more high spenders and fewer low spenders was the main reason
why spending increased.
On average, consumers intended to spend £351 on Christmas gifts for
immediate family and friends. Post-Christmas research indicates that
they actually spent £400, 14% more. Those least able to forecast their
spending correctly were those with young children, over-65s and those
in socioeconomic group E who appear to have felt able to loosen their
purse strings more than anticipated.
3.1.4. Online altering the sales pattern for home shopping retailers
2006 was a massive Christmas for online retailers and increased use of
online will contribute to later shopping patterns. This is because people know
they can order late and still get their gifts in time for Christmas because
traders are offering reliable 48-hour delivery as standard. This shifts the
traditional peak for home shopping from November into December.
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3.2. Segmentation
Mintel segments the gifting market as follows:
Group 1: Bore Chore (36%) – an opportunity to excite and inspire.
The primary characteristic of this group is that they think Christmas
gift buying is a chore
Group 2: Excited but Unprepared (17%)
These consumers show high enjoyment for Christmas buying (69%,
average = 54%), but at the same time appear unprepared financially
for the event.
Group 3: Well-prepared (28%)
Similar to the Excited but Unprepared, these consumers also show high
levels of enjoyment for Christmas buying (92%). However, they contrast
markedly in that they show a prepared attitude towards Christmas buying,
Group 4: Unseasonal Buyers (19%)
The most notable characteristics of this group is that they show a
tendency to buy out of season for Christmas gifts.
Full details of the characteristics of these segments, and much more
information on the Christmas gifting market can be found in Mintel’s
Christmas Shopping Habits report, February 2007.
4.
the potential for gift subscriptions
A large 73% of consumers who hold a subscription themselves are not
involved in gift subscriptions at all, either giving or receiving. The implication
is that there must be significant potential to grow this whole area of the
subscription market.
Source: PPA/Royal Mail/Brand Lab,
“The Loyalty Challenge”, November 2006
It is clear that gift subscriptions offer the publishing industry the potential for
significant extra subscription sales.
4.1. How many subscribers give gift subscriptions?
Do you currently give or receive a gift subscription?
Gift subscription activity
Yes. I have paid for a gift subscription for someone else
%
19
Yes. I receive a gift subscription paid for by someone else
5
Yes. I both give and receive a gift subscription.
3
No. None of the above
Total
Base: Magazine Subscribers
6
73
100
The focus groups conducted as part of the research show that magazine
gifting is a very black and white area – people either already do it and
think that it is a great idea or it has simply never occurred to them at
all. For this second group, once explained, they too enthused about
the idea, but they had lots of questions about how to do it. The level of
consumer awareness about this whole area still seems to be quite low.
“It’s dead easy. My husband really enjoys it.” (Women’s Specialist)
“Giving a magazine as a gift. Now that idea has never occurred to me.
Is it difficult? I bet it’s especially good for people who are difficult to
buy presents for.” (Men’s Specialist)
4.2. What are the characteristics of gift subscription donors?
• Gift subscriptions donors do not display the male bias that is
apparent for self subscribers
Gender
Self
Subscribers
Index
Gift Sub
Donors
Index
• Age has always been a strong driver behind self-subscription;
here it is apparent that gift subscriptions are more likely to be
given by subscribers in the 45-54 age bracket
Male
130
100
Female
82
100
• Existing buyers of magazines in the following categories are
more likely to purchase gift subscriptions: Countryside & county,
Gardening and News & Current Affairs
16-24
55
72
25-34
75
43
35-44
78
104
45-54
104
122
55-64
122
110
65+
175
142
Age
Indexed on total research sample
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Magazine Sector
Gift Sub Donors Index
Music
91
Adult
78
News & current affairs
126
Buying & selling
73
Parenting
66
Computing
90
Puzzles
87
Countryside & county
170
Sport
99
Gardening
134
Teenage
78
Hobbies
90
Trade & professional
114
Homes & decoration
120
TV listings
84
Men’s lifestyle monthlies
81
Women’s monthlies
113
Men’s lifestyle weeklies
113
Women’s weeklies
89
Motoring & motorcycling
105
Young women’s
74
Other
129
Indexed on total research sample
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4.3. Number of gift subscriptions held
How many subscriptions do you currently pay for as a gift for someone else?
Gender
No. of Gift Subs Given
No. of gift subs
Male
1.4
%
1
80
Female
1.5
2
14
Age
No. of Gift Subs Given
3
4
Under 44
1.6
4–6
1
45-54
1.2
7 – 10
0
55+
1.5
10 Plus
1
Base: Gift Subscription Donors
Total
100
Base: Gift Subscription Donors
The average number of gift subscriptions taken out at any one time is 1.4 subs
per person. This is the same level as recorded in Royal Mail’s 1999 Omnibus
Survey. Splitting this by gender shows females have on average taken out a
slightly higher number of gift subscriptions.
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Note: The sample size is insufficient to provide breakdown by magazine sector.
Some age-bands have been combined to provide sufficient sample sizes.
4.4. Source of gift subscriptions
If you have purchased a gift for someone else, please indicate where you
purchased your gift subscription from (Please select one)
Source of Gift Subscription
%
From an advert or insert in the magazine itself
40
Internet –direct from publishers website
27
Internet – from an online subscription shop (e.g. isubscribe.co.uk)
13
Cannot remember
8
Gift box (e.g. a special pack from a shop like WHSmith)
6
Other
6
Total
100
Base: Gift Subscription Donors
The obvious first place to go to buy a gift subscription is to the magazine itself,
either by buying a copy or by going to the magazine website. With 40% going
via the Internet (27% publishers’ own sites plus 13% online shops), this
is becoming a major channel for gifting.
Retail subscriptions, such as the WHSmith “pillow packs”, seem to have good
consumer awareness, as evidenced by the focus group discussions, but it is
not yet a dominant route for the actual gift subscription purchase itself.
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4.5. Renewal intentions
The impression from the focus group discussions is that the first time a
magazine gift is given, it is often a last minute “brainwave”, but that consumers
are then unsure what to do at renewal.
When you buy a gift subscription how often do you continue with the gift the
following year? (Please select one)
Renewal activity
%
I always extend the gift the following year
22
I sometimes extend the gift the following year
52
I never extend the gift the following year
26
Total
Base: Gift Subscription Donors
100
Over a quarter of gift donors subscribe in the knowledge that this will be a
one-off, “in and out” purchase. The focus groups suggest that there can be
several reasons for this:
Gender
• The donor does not want to appear boring or unimaginative in repeating the
same gift idea repeatedly.
Male
91
Female
106
• The donor is not always completely sure that the magazine choice is the right
one
Age
16-24
167
• “If they really like it, then they can always get it themselves.”
(Men’s Specialist)
25-34
100
35-44
86
Breaking responses down by gender and age reveals:
45-54
108
55-64
101
65+
90
• Females are slightly more likely to renew their gift subscription
• And there is a significantly higher likelihood that gift subscription donors
aged 16-24 will renew the gift subscription
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Indexed on all Gift Subscription Donors
“I always / sometimes
extend my gift
sub” Index
4.6. Future gift intentions
41% of self-subscribers and 22% of non-subscriber magazine buyers are
likely to give a magazine gift subscription in the future.
How likely are you to give a magazine subscription as a gift in the future
Gift intention
Subs %
Non–Subs %
Very likely
10
3
These figures show:
Quite likely
31
19
• The obvious bias of existing subscribers to give a subscription as a gift
Not very likely
36
41
• The overall potential for magazine gifting
Not at all likely
23
37
Total
100
100
Breaking responses down by gender and age reveals:
• Female magazine buyers and those in the 16-54 age bracket are more
likely to purchase a gift subscription in the future
• Existing buyers of magazines in the following categories are more likely to
purchase gift subscriptions in the future: Countryside & county, Gardening,
Homes & Decoration, Men’s lifestyle weeklies, and News & Current Affairs
How likely are you to give a magazine subscription as a gift in the future
Gift intention
Subs %
Non–Subs %
Very likely
10
3
Quite likely
31
19
Not very likely
36
41
Not at all likely
23
37
Total
100
100
Base: All Magazine Buyers
12
Base: All Magazine Buyers
4.6. Future gift intentions continued
Gender
“Likely to buy a
gift sub” Index
Homes & decoration
133
Men’s lifestyle monthlies
117
Male
84
Men’s lifestyle weeklies
133
Female
110
Motoring & motorcycling
100
Music
114
Age
16-24
116
News & current affairs
124
25-34
104
Parenting
114
35-44
119
Puzzles
84
45-54
107
Sport
100
55-64
74
Teenage
111
65+
79
Trade & professional
103
TV listings
84
Magazine Sector
Adult
108
Women’s monthlies
115
Buying & selling
110
Women’s weeklies
88
Computing
84
Young women’s
88
Countryside & county
141
Other
91
Gardening
122
Indexed on total research sample
Hobbies
105
Note: “Very likely” and “quite likely” have been combined to provide
sufficient sample sizes for the cross-tabulations.
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5.
barriers to gift subscriptions
Source: PPA/Royal Mail/Brand Lab,
“The Loyalty Challenge”, November 2006
Some potential downsides were uncovered at the focus groups:“It’s quite a nice idea, but it seems a bit cold. A bit impersonal.”
(Women’s Specialist)
“I know that my uncle loves classic cars, but I don’t know which specific
magazine he likes best and there are quite a few to choose from.”
(Men’s General)
“Is it really that exciting to get a magazine? It will just arrive in the post,
won’t it, like any other magazine? Or do the magazines send out some kind
of gift card or box or something to make it more special, more of an event?”
(Men’s Specialist)
“My Aunt gives me She. She’s done it for the last three years or so. It’s a
lovely thought and it was great to begin with. But I’m getting a bit bored with
it now. I’d like to change it for something else. But how can I tell her without
seeming ungrateful or mean?” (Women’s General)
Making the whole gifting process more of an event and giving the recipient
more freedom to choose and control the title selection are important
enhancements which publishers can make to overcome some of the barriers.
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6.
conclusion
Gift subscriptions present an opportunity for subscriptions growth.
Consumers want to receive magazine subscriptions as a gift, but there is a lack
of awareness amongst consumers as to how and where to buy a subscription.
The growth of the online channel for Christmas shopping demonstrates
consumers’ increasing use of the internet for their purchases. This is reflected
in the research which shows 40% of donors purchased the gift subscription on
the internet – either direct from the publisher’s own website or from an online
subscription shop. Adverts in magazines themselves continue to be a powerful
way to recruit gift subscription donors.
Existing subscribers are the most likely to give a gift subscription.
The average number of gift subscriptions purchased stands at 1.4 per
subscriber and fewer than 1 in 5 subscribers have given a gift subscription.
The category of magazine which current readers buy, points to their likelihood
to purchase a gift subscription both now and in the future.
7.
sources
7.1. Mintel: Christmas Shopping Habits – UK – February 2007
Mintel publishes over 45 reports each month, covering a wide range of
sectors and focusing on topical marketing issues. Divided between UK-specific,
European and USA reports, Mintel reports analyse market sizes and trends,
market segmentation, and consumer attitudes and purchasing habits, as well
as assessing the future of the market.
7.2. PPA: The Loyalty Challenge; How consumer magazine
subscriptions work.
Qualitative research (four focus groups) informed the quantitative research
which was conducted through an online panel. Over 6,600 responses were
received to the self-completion questionnaire. Research was conducted by
BrandLab on behalf of PPA, sponsored by Royal Mail in November 2006.
Royal Mail, the Cruciform and all ™ and ® are Trade Marks
of Royal Mail Group Ltd. All rights reserved.
Royal Mail Group Ltd is registered in England and Wales. Registered
number 4138203. Registered office: 148 Old Street, LONDON EC1V 9HQ.
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