Executive Overview: Now is the time to be diligent and to do your homework in order to capitalize on the opportunities associated with the gifting economy. To take advantage of the market opportunities associated with gifting, there are five important steps you will need to take to commit to gifting.
Commit to Gifting
It is never too early to think about capitalizing on the 4th quarter holidays. We are hoping vaccines are plentiful and that the pandemic is behind us, so we suggest using these next few months wisely. Of course, there are many business initiatives that deserve our attention. One that I believe should be a year-round initiative is the user experience—and that means gifting as well as personal consumption. Sometimes gifting only garners our attention during peak selling seasons such as the 4th quarter, and this is unfortunate. To commit to gifting, gifting needs to be elevated via internal discussions to ensure it receives the exposure and execution it deserves.
Now is the time to be diligent and to do your homework in order to capitalize on the opportunities associated with the gifting economy. With that in mind, we created the e-tailing group 2020 Gifting Index (Sponsored by GiftNow) as an all-season guidance tool.
To commit to gifting and take advantage of the associated market opportunities, here are five important steps you will need to take:
1. Know your gift customer
To reset one’s strategy, we encourage every retailer to start by understanding their gift givers. Whether you are a seasoned gift seller or considering prioritizing gifting as a business initiative, it is always wise to revisit these five customer elements:
- For whom do they buy?
- What do they currently buy?
- What other products might they consider?
- How much do they spend?
- What is their frequency of purchase?
Explore what your customer is buying and whether they favor certain product categories. This can help as you build very targeted gift marketing strategies sure to resonate with visitors including branding, products and tactics. At the same time, you want to understand the budgets of these buyers. This can be invaluable in designing appropriate search by price parameters. From a recipient standpoint, knowing both the demographics and psychographics of shoppers can assist in developing themes that capture their attention and are right for those audiences. Lastly, know whether your gift givers are inclined to buy once a year or if there is an opportunity for more frequent shopping experiences.
2. Put a 4th quarter plan in place for gift shoppers
Now that you have done some introspection on your customers and, while each quarter of the year is important, it is time to start building a 4th quarter plan that can then be leveraged throughout the year for people shopping for gifts on your website. If possible, begin by looking at last year’s holiday numbers to assess both your successes and any missed opportunities. It would be my recommendation that retailers build their 4th quarter plan on a month-by-month basis for both focus and flexibility. There is always time for change, as we learned all too well in 2020.
As part of that effort, explore how you can make your site more of a destination for gifters. Ask yourself how you can create an experience for your shoppers that compels them to make your site one of their “go to destinations” when they are shopping for gifts. Looking back at our 2020 Gifting Index, 92% of the 50 retailers evaluated had a gift center along with the following functionality:
- Many creatively delivered destinations that were efficient in their search offerings including by price, recipient, and/or occasion (88%).
- Leaders included both new (10%) and favored products (42%) that can be part of the shopping. Think fun, fast, and full service as gift givers are always in a hurry to get the job done well.
- Many integrated gift giving into the entire experience, giving it the visibility it deserves during key seasons. This could include a tab on your top navigation or, at a minimum, allowing shoppers to easily find and purchase a gift card. Our index revealed that 85% allowed for such an experience at the footer location. Ideally this visibility will have a year-round presence.
When doing your annual planning, let the creative juices flow and ask yourself how you can better market gifting by exploring what themes will resonate and finding what is unique given your category and brand.
3. Be introspective regarding your policies
From a dollars and cents perspective, embracing free shipping should be on every retailer’s radar screen. We have learned over the years that free shipping is desirable and a factor in retailer selection. With that in mind, making it obvious and easy for customers to understand your shipping fees is advised. This should include both current and holiday strategies. Perhaps you will require shoppers to purchase at a dollar threshold or only offer free shipping for rewards members. I would encourage all retailers to establish a set of competitors that they can look at to understand their policies. This is an important exercise whether you choose to fall in line or go your own way.
As a point of reference, 26% of the 50 retailers in the e-tailing group Gifting Index offered unconditional free shipping last holiday season. The beauty of the internet is that this is something that can be turned both on and off throughout the year. Just remember, once your shoppers get a taste of it, it could be more difficult to turn off without shopper disappointment and declining conversion rates.
4. Revisit customer service policies with flexibility in mind
Retailers must take care of their customers with every transaction and this passion for performance may be one of the best retention weapons. When I think of customer service, it starts with how accessible help is for shoppers, including where it can be found on the site. It also includes what customer service touch points will be offered, including live chat.
Additionally, it is an excellent time to revisit your return policies and how they stack up with your competitors and the industry at large. Consideration should be made for maintaining a consistent policy or, if a seasonal approach, with extended return options or a no questions asked policy is a better fit.
5. Leverage Efforts for Year-round Initiatives
By revisiting your current initiatives, you can put yourself in a position to foster year-round gifting visibility. While it is difficult to compete with the 4th quarter, there are many reasons that shoppers look to give a gift year-round. Remember to assess your current position to know where the opportunities lie now and in the 4th quarter. Investing time now to reset your 2021 gifting will put you in a perfect position to capitalize not only during the winter holidays but also on the year-round gifting economy.
When you commit to gifting, you can help maximize the ability to capitalize on the gifting economy.
Lauren Freedman is the president of the e-tailing group.