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Presents That Won't Fit Under The Christmas Tree

News: Analysis & Commentary: RETAILING


Retailers feel the pinch as more givers lean toward services

This Christmas, Michael J. Maiman thinks he has found the perfect gift for his son. At a recent charity auction to benefit the 16-year-old's Detroit high school, Maiman shelled out $3,000 to have a character in crime novelist Elmore Leonard's next book named after the boy. Tobias M. Levkovich of New York also wants to give a memorable gift this season. For his wife, Barbara, he's splurging on a holiday-birthday bash featuring a staged murder mystery that the guests get to solve. "I wanted to do something a little weird," he says.

The quirky tastes of people like Maiman and Levkovich help explain why the holiday season is no longer the bonanza that it used to be for the Bloomingdale's and Macy's of the world. Retail experts predict that holiday sales this year at department stores, discounters, and other merchants will climb a modest 3% to 4% above last year's level.

LESS CLUTTER. But more and more consumers--particularly baby boomers--are forsaking traditional mementos such as clothing and electronic gadgets. Instead, they're giving friends and family members vouchers for travel, massages, or restaurant meals. Says C. Britt Beemer, chairman of America's Research Group, a market researcher in Charleston, S.C.: "When we talk to consumers, they tell us they have bought all the material things they need or want to buy--and that they would rather get a half-day at the spa than another pair of earrings they're not going to wear."

According to the 1997 American Express Retail Index on holiday shopping, consumers plan to expand their Christmas budgets by 6.3% this year, to $1,233. But they expect to shell out 55% more on travel and 44% more on entertainment, while spending 2% less on tangible gifts. "Consumers simply aren't shopping till they drop anymore," says Daniel A. Bethlahmy of American Express Co. They want memorable experiences, not more gadgets, he says.

That's what Donna Maurice of Oak Bluffs, Mass., has in mind for brother-in-law Alton G. Mitchell, a retired NASA flight engineer. After decades of sweaters and watches, this year Mitchell will receive a $70 certificate for a sightseeing tour of Martha's Vineyard on a Korean War-era Navy plane. "At 71, he pretty much has everything," says Maurice. "He loves flying and antique planes, so this seems like the perfect gift."

Meanwhile, some gift-givers are offering the recipient nothing at all: Instead, they make contributions to nonprofit organizations in that person's name. Each Christmas for 10 years, Jeanne Cox, a Dallas homemaker, has donated $50 to $250 to the Dallas Zoological Society's adopt-an-animal program in the name of friends and family. "We started giving these adoptions because Christmas has gotten so overblown," says Cox. "This is a good way to make a gift really count for something."

YEAR-ROUND PROMOTING. Still, the trend is no gift for the stores. Retail consultant Management Horizons, a subsidiary of Price Waterhouse, says that November and December sales of general merchandise as a share of the yearly total have dropped from 25.5% in 1988 to 23.6% in 1996-- a difference of $13 billion. Such changes, though gradual, don't bode well for retailers, say industry experts. "These shifts in consumer attitudes will require that retailers find ways to boost sales earlier in the year, not just during the holidays," says Irwin B. Cohen, co-chairman of the Consumer Business Practice at Deloitte & Touche.

That's the thinking at Zale Corp. The nation's largest jewelry store has been aggressively courting shoppers before holidays such as Mother's Day and Valentine's Day. The fourth quarter still accounts for about 75% of the year's profits, but that's down from 95% in 1994. "Christmas will always be the most important time of the year," says CEO Robert J. DiNicola, "but we are trying for more of a balance." Apparently, so are shoppers.By Stephanie Anderson Forest in Dallas, with Katie Kerwin in Detroit, Susan Jackson in New Haven and bureau reportsReturn to top

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