The US corporate gifting market is projected to reach $242 billion by the end of 2021 and grow to $306 billion by 2024, at a CAGR of 8.1%, per Coresight Research.
How many times a year do you receive a business gift? Perhaps some of your vendors send you a package around the holidays or you get something for attending a virtual (or perhaps soon to be physical) event. Many retailers and businesses may not realize the vast size and scope of the US corporate gifting market. It represents a massive opportunity – and not just for B2B gifting between employers and employees or businesses and clients and prospects. It also represents a huge channel opportunity for retailers and merchants.
Assessing the Size of the US Corporate Gifting Market
It’s been almost three years since the US corporate gifting market size was estimated to be around $125 billion and the market has grown significantly, estimated now north of $242 billion and growing at over eight percent a year, according to Coresight Research.
To get an objective assessment of the US corporate gifting market size and trends, GiftNow recently commissioned a study by Coresight, Unwrapping the American Corporate Gifting Opportunity. Coresight surveyed 300 corporate gift buyers in the US, studying the key challenges and benefits related to corporate gifting. Their report also explores the impact of Covid-19 on the corporate gifting market and how it may affect the future.
Key findings in the Coresight report include:
- The corporate gifting market is projected to reach $242 billion by the end of 2021 and grow to $306 billion by 2024, at a CAGR of 8.1%. This could represent a $64 billion incremental growth opportunity through 2024.
- The frequency of gifting corporate gifts is increasing: Almost six in 10 (58%) respondents reported that they gave gifts either the same or more now than they did prior to remote working.
- Perhaps addressing the previous point about gifting more gifts, the emotional and sentimental benefits of gifting outweigh monetary benefits. People wanting to improve relationships with their customers and employees was the top advantage of corporate gifting, with 43% of respondents ranking it among the top three advantages—surpassing benefits such as lead generation and improved sales.
- Gift cards – both physical and digital – emerged as the most purchased corporate gifts in the last 12 months.
The Emotional and Sentimental Benefits of Corporate Gifting
According to Coresight, corporate gifting is an important tool to strengthen relationships and make the recipient feel valued. While there are direct monetary benefits of corporate gifting, including lead generation and improved sales, these are overshadowed by emotional and sentimental benefits. The corporate gifting market report lists three key advantages cited by the survey respondents:
- Improving the relationship with customers and employees: 43% of respondents ranked improved relationships as among the top three advantages of corporate gifting.
- Making the recipient feel valued: 38% of respondents ranked this advantage as among the top three.
- Improved employee productivity: Almost four in 10 respondents ranked employee productivity among the top three advantages of corporate gifting.
Given the importance of relationship building, it’s important to think about the types of gifts that you give and how they are delivered and presented to the recipient. I think most of us have probably received gifts that will make perfect presents at the next white elephant party. You know, an extra large t-shirt when you wear a small, but they were out of all of the other sizes. Or, another USB drive. How many logo bearing USB drives do you have tossed in a drawer? To be effective, the gift should be something the recipient wants and needs, not just another trinket that won’t be used, enjoyed or valued.
The Opportunity for Retailers
Corporate gifting doesn’t have to be limited to logo’d swag and this is where the market opportunity for retailers comes into play. The ability of a sporting goods, home electronics, clothing, hobbyist or outdoor supplies retailer to provide their gifts to the corporate gifting market can open up new channels for the retailer’s merchandise. Recipients who may not have otherwise been exposed to your brand or products suddenly are introduced to exciting categories of items.
For example, with GiftNow for corporate gifting, we are able to offer merchandise from a variety of retailers including department stores (offering everything from coffee makers to workout equipment and backyard game sets), clothing, sporting goods and accessories, to name a few. The gifter can offer a selection of choices, which can be customized by size and color by the recipient, if needed. A wide selection of gift cards are also options. It’s the end of “one size fits nobody” corporate gifting.
Three Recommendations for Winning in Corporate Gifting
Based on their survey analysis, Coresight recommends focusing on three key recommendations for corporate gift providers to achieve success:
- Adding more meaning to gifts by allowing individualized choices can help make the recipient feel valued. Coresight found that gift buyers send out corporate gifts to primarily strengthen their relationship with their employees and clients and with an intention of making the recipient feel valued.
- Innovation in gift cards can help gift givers achieve their primary goal of relationship building. Gift cards often appear devoid of thought and can be very transactional in nature. Adding personalization features to gift cards. including innovative digital card approaches such as a personalized video greeting or allowing the recipient to revert using either text or video can substantially transform the recipient’s experience.
- Enabling the recipient to select their gift before it is shipped and providing the ability to track their gifts can substantially improve the overall gifting experience. This will also help address key challenges such as a limited range of products and limited customization options at scale.
Download Unwrapping the American Corporate Gifting Opportunity to get the complete research findings.
Kevin Payne is the Vice President of Corporate Marketing for GiftNow