While retail spending is slowing down across the country and the Australian Retailers Association predicts a softening in Christmas sales, Aussies’ affection for gifting is still going strong.
Bolstering the trend, their year-on-year spending on others has surged by 60 per cent, as reported by Best Gift Group.
Rajneen Arora, CEO of Best Gift Group, says that Australia’s culture of generosity and the current economic climate are driving the popularity of gift cards.
“We saw Australians band together during the Covid-19 pandemic and with that generosity behaviours manifested and changed and it’s clear this generosity isn’t going anywhere,” she says.
Recent figures from the Australian Bureau of Statistics have revealed a 0.5 per cent decline in Australian retail turnover. This decline follows a downward trajectory that saw a 0.8 per cent drop in the March 2023 quarter and a 0.4 per cent fall in the December 2022 quarter.
However, Australians are still spending money on gifting. Kieran Johnson, ‘The Generosity Guy’, says that there’s a strong link between the act of giving and happiness.
“Even though there are some tough financial challenges for Australians, generosity continues to grow,” he explains.
“This is not a surprise, science tells us that a generous act brings psychological, emotional and physical benefits and that people are happier when they spend money on others rather than on themselves. It then creates a chain reaction; when we receive a gift, we naturally want to give to others, spreading it through the community.”
Indeed, 85 per cent of Australians get more joy from giving gifts to others than receiving gifts themselves. Australians may not be spending on themselves, but they are continuing to spend money on others, with gift cards playing an important role in facilitating that spending.
Research shows that Australia’s gift card industry is expected to increase by 11.3 per cent on an annual basis, from US$5,446.5 million in 2021 to US$8,504 million by 2026.
“As the holiday season approaches, we expect to see this trend maintain its momentum with Australians picking gift cards (47 per cent, up from 44 per cent in 2019), money (40 per cent) and clothes (32 per cent) as their top choices. There’s no doubt the rising cost of living will further cement gift cards as a preference for receiving gifts this year.”