High school and college graduation are important milestones, and gifting for graduates is a highlight of Spring retail spending. Friends and family members want to strike a balance between gifting thoughtfully, appropriately, and practically. The National Retail Association’s 2022 survey of more than 8,000 consumers (18+) shows that both the number of people gifting for graduates and the amount spent per gift is on the rise. Retailers have several opportunities to make the most of graduation season, and RMS is uniquely positioned to keep brands ahead of the curve.
The sheer volume of people purchasing graduation gifts is climbing. The NRF reports that the number of people purchasing graduation gifts hit a ten-year low in 2020. But in just two years the number of purchasers has rebounded to the ten-year average of 33%, with a total expected spend of $5.8 billion across the population. The average amount spent on graduation gifts is also climbing, a trend that has continued steadily in recent years. Respondents to the 2022 survey reported spending an average of $114 on graduation gifts.
What People are Gifting Their Grads
But what are people actually giving the graduates in their life? There are more options out there than ever, and some experience pressure to come up with unique or personalized gifts for graduates, which is why it’s no surprise that the most popular choices for graduation gifts continue to be cash, cards, and gift cards. Cash is by far the most popular graduation gift, accounting for 52% of graduation gifts in 2020. Giving cash gives graduates the option to spend or save as they choose, an important parallel to their transition into adulthood.
A card with a personal message is still an important way to congratulate graduates on their achievements. Cards account for 37% of graduation gifts in 2022. When paired with cash, a card can combine a personal touch with practicality. The card’s message could be an opportunity to suggest how the cash or gift card could be spent, such as for dorm room supplies or headphones of the graduate’s choice.
In a similar way, gift cards can suggest a type of gift while giving the graduate the actual purchasing power. Gift cards are the third most popular choice in the NRF survey, accounting for 31% of graduation gifts. With gift cards, retailers have two opportunities to connect with consumers: first with the initial purchase of the card by the gift-giver, and then with the graduates themselves. Whether catching the attention of someone purchasing a gift card or drawing in a graduate with a gift card to spend, brands must ensure that their shop floor presence is on point to maximize in-store execution.
How RMS Can Help Brands Capture Grad Dollars
RMS is uniquely positioned to assist brands in making the most of graduation season. Your RMS account manager works with you to develop ISM strategies and conduct field tests of the service, ensuring that displays are in place and up-to-date and that shelves are re-stocked promptly. 64% of consumers report that the in-store experience has the greatest influence on what they choose to purchase, making these strategies essential for driving graduation season purchases.
In-store displays and stock-level management are important for other graduation gift categories too. Apparel and electronics represent 16% and 11% of 2022’s graduation spending respectively in the general population. These gift categories are more popular among younger graduation gift-givers, with 27% of people aged 18-34 spending on apparel and 19% in the same age group spending on electronics. Electronics and apparel brands have a great opportunity to catch the wave of younger graduation gift-givers spending more on the graduates in their lives but need to have reliable strategies to track and improve in-store execution.
RMS uses a proprietary platform to provide summary-level and store-level reporting that makes the difference in enhancing your merchandising strategies. Combined with our management team’s more than 150 years of executive retail experience, our cutting-edge reporting allows brands to shape their presence to meet the shifting habits of our younger consumers.
While younger graduation gift-givers are more likely to give electronics and apparel, consumers age 45 and up overwhelmingly give cash. In the 65+ category, 66% of respondents report gifting cash to graduates. This trend is driven by the belief that graduates are better at selecting gifts for themselves, and also from the understanding that they may need more help with basic necessities than they realize. As graduates enter a challenging economic climate, help with groceries and dorm room basics can actually be the best use of graduation gift funds.
The class of 2023 has faced some unprecedented challenges on their way to graduation. Remote learning and economic uncertainty have shaped their experience in education and will continue to shape their lives. Friends and family members recognize this and are showing up for graduates with gifts that empower them. Whether they receive cash or gift cards, graduates will be making the ultimate purchasing decisions on their graduation gifts. Brands have two waves of consumers to catch this graduation season, and RMS has the tools and experience to make the most of it.
Interested in partnering with RMS for all of your retail merchandising needs? Call us today!