Gift Cards Skew Retailers' Post-Holiday Pricing Strategies

[mandy]

The holidays are over, but retailers are still waiting for the holiday shopping season to end.

Increasingly, consumers are opting to give gift cards instead of actually buying an article of clothing or an electronic gadget. This is good news for retailers hoping to drive up modest margins. When redeeming a card at the store, the gift recipient usually winds up spending more than its face value, according to a recent survey by Accenture.

At the same time, though, the growing popularity of gift cards introduces uncertainty into retailers' pricing, merchandising and customer service operations.

Retailers might be able to eke out additional margins on certain items if they take expected gift card redemption into consideration. "They could factor in cross-sell affinities of certain items, for instance, and plan promotions,"...

full article: http://www.crmbuyer.com/story/48098.html