It’s always fun to talk gifting and our February 23 CommerceNext webinar presentation gave us just the opportunity to discuss capitalizing on the gifting economy. You can view the replay here.
CommerceNext co-founder, Allan Dick, is a moderator extraordinaire. John Grech, Head of Retail Partnerships at GiftNow, kicked things off and put the gifting opportunity in context, including a look at Valentine’s Day’s powerful performance. His reference to the gifting “slice” of the e-commerce business really resonated with me as this niche is unique in its execution and customer involvement. Estimated at $653 million in 2020, with 20% expected growth potential by 2024, it is really beyond that “slice.”1 He also reminded us that 75% of the retailers surveyed view gifting as important to their e-commerce strategy, yet only 2% are doing it well.2
Next, I had the pleasure of sharing the e-tailing group 2022 Gifting Index, sponsored by GiftNow. Highlights of the fundamentals of what is ideal in a digital gifting business and corresponding best practices allows retailers to both score, benchmark and enhance their current performance.
From there, it was all about the panelists and our group was diverse and informed with Barbara Ann Hagen of ThriftBooks, Mike Lackman of Trade Coffee and Natalie Brown of Sur La Table. After all these years there’s still both questions and opportunities that warrant the retailer’s attention.
So What About the Corporate Gifting Opportunity?
The first audience polling question revealed that 37% of those attending the webinar had corporate gifting capabilities. Knowing that, it’s not surprising that there was a good deal of discussion among the panelists as corporate gifting can be a strong component of some retailer strategies to capitalize on the gifting economy. We touched first on what matters and, for me, it was about visibility, a robust destination and behind-the-scenes expertise.
Natalie at Sur La Table talked about the role of private events that brought people into the stores. Their use of grassroots marketing utilizing store associates within each of their communities was innovative and ensured it got the visibility it deserves.
John from GiftNow reinforced that corporate gifting requires a deliberate effort and that sellers need tools and resources for execution. Their experience has shown that brands tend to execute better than retailers.
Does Personalizing Digital Gifting Have Value for the Shoppers?
Barbara at Thrift Books reflected about their shift from an in-house gifting model to using GiftNow’s platform. With that change, they believe they have enabled their customer to give something “thoughtful.” This includes customization using video, photos, and themes, which takes the experience up a notch.
Video is creative and a tool to capitalize on the gifting economy as it makes for a “different” experience. It can make an important connection and personalizes what otherwise might be a very impersonal experience.
Capitalizing on the Gifting Economy: Striving for Year-round Gifting
While there is a lot of talk about the holidays, retailers should strive for year-round gifting excellence. For Sur La Table, a gift landing page is essential with attribute-driven navigation that should be part of the shopper journey. That also means it must have a complete story and inspire shoppers. There’s an ego part to gifting as a “good gift reflects well on you.”
While one might not believe this to be the case, Barbara from ThriftBooks alluded to the fact that used books are still giftable. In fact, they had a “Gifts for the Ungiftable” as part of their holiday strategy, offering solutions of both new and used books. Of course, they have a significant back-to-school business and many students don’t know initially what they need. Parents can still gift books and students can subsequently make the purchase. She also emphasized that birthdays matter and books can be high on this list with digital gift cards, a great year-round option.
Knowing the Gift Giver is Essential for a Successful Gift Card Sales Model
Shoppers have a lot of questions. Per Mike at Trade Coffee, they include “Will it show up,” “Will they know it’s from me?” “Does the presentation look good?” and “Can I personalize the gift?” Merchandising and marketing to gift givers is different but it certainly is an opportunity to reach both audiences. Mike was clear in saying that the barriers to conversion are different. The way you present the product is different and that requires a different merchandising mindset.
Everyone spoke about putting yourself in the mind of gift buyer vs. self-consumption as those are two distinct mindsets. The gift giver is not your standard customer and they buy differently, according to Mike. They need to be inspired and it helps to know something about the gift recipient.
An important opportunity that comes from gift buyers is making sure to use data for future marketing. Along with this, the discussion then turned to how gifting can defend margin and that is always welcome as one of the best parts of gifting is the financial contribution it can make to the business.
Gifts are both priced and promoted differently. In a self-purchase scenario, there tends to be more of a price/value relationship while gifting affords greater customer elasticity. The ability to move shoppers upwards in their AOV is much greater than what it takes with self-consumption. Again, it speaks to knowing the customer.
Capitalizing on the Gifting Economy: How Do You Stack Up?
Gifting is always ripe for discussion where improvements will be welcome all year-round. Both gift givers and sellers benefit as they work to deliver more robust and personalized gifting experiences that contribute to the bottom line.
But how does your company stack up?
Check out our 2022 Gifting Index which includes a scorecard for you to evaluate how your company performs and its ability to capitalize on the gifting economy.
Lauren Freedman is president of the e-tailing group
1: Sources: Coresight Research “Unboxing the Gifting Market amid Experience-Driven Retail” November 2020 and “Unwrapping the American Corporate Gifting Opportunity” June 2021 with GiftNow extrapolations based on Coresight data.
2: RetailDive StudioID Pulse Survey, July, 2021
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