Gift-Selling Strategies for Retailers in the Experience Economy

04/23/2018

Market research expert Pamela N. Danziger believes committing space to a dedicated gift section is a good move for any retailer – as long as it comes with a memorable gift-shopping experience. In this article from her free weekly enewsletter, she discusses why people gift, what makes a great gift, and tips for creating a gift-shopping destination.


Giving gifts is deeply embedded in our DNA. We give gifts to show our affection, appreciation, and love for one another. Gift-giving bonds people together, with the gift being a totem expression of deeper meaning and emotional significance. Unity Marketing estimates that about $1 out every $10 spent in the typical retail store (defined as general merchandise, apparel, furnishings, and others), and increasingly with online retailers, is spent on a gift for someone. That translates into approximately $128 billion spent on gifts in 2017.

Gift buying occurs throughout the year to celebrate holidays and to mark special occasions, life events, and milestones. Christmas and birthdays are the two biggest gifting events, followed by five other gifting holidays: Valentine’s Day, Mother’s and Father’s Day, Easter/Passover, and Halloween. In between are weddings, anniversaries, baby showers, housewarmings, graduations, etc.

There’s reciprocity in the process. Gifters are rewarded with an emotional connection and the feeling of sharing, while the receiver benefits from the gift’s utility and sentimental significance. The bond between the two parties deepens. 

Best of all (if you’re a retailer), selling gifts can be an exponential marketing strategy that builds customer loyalty and repeat business. It touches two target consumer markets at one time: the gifter and the recipient. Therefore, retailers can experience great rewards in developing marketing and merchandising strategies to grow their gifting business.

Studying the science of gifting

In psychological terms, gifting “fosters stronger social relationships.” An important new study, conducted at the Wharton School, University of Pennsylvania, sheds light on the kinds of gifts that build the deepest relationships. It was led by Cassie Mogliner Holmes, UCLA Anderson associate professor of marketing and the “world’s leading authority on consumer happiness,” along with Cindy Chan, assistant professor of marketing, University of Toronto, who specializes in consumer relationships.

While existing gifting research focuses on how much gift recipients appreciate, value or like particular material gifts, this study focused on how gifts create emotional connections; specifically measuring the impact of material versus experiential gifts. To do that, the study asked a simple question; one that is increasingly relevant in today’s experience economy: “Would giving something to do or something to keep forge a stronger social connection?” In other words, what will create a stronger relationship: giving someone an experience or giving someone a tangible “thing”?

The researchers conducted a series of three experiments to tease out some of the nuances in gift giving, and all focused on how connected the gift made the recipient feel to the giver; not simply on how much the recipient liked the gift.

Because emotions are evoked both during the gift exchange and by the gift itself, the researchers separated the two. They studied the effects of sharing a gifted experience between the recipient and the giver, and they studied the recipient enjoying the experience alone. In addition, they investigated the difference between a static material gift and gifts that have a more experiential aspect, such as wine or chocolate.

They’ll have “the experience” please

Their findings are clear. Despite gift givers’ tendencies to give material possessions, material gifts do less to foster meaningful relationships between gift givers and gift recipients. “Experiential gifts, in contrast, make recipients feel closer to the person who gave them the gift, regardless of whether the experience is consumed together with the gift giver because of the emotion they evoke when consumed; particularly when the emotion is shared.

“It demonstrates that giving experiential gifts is more effective at fostering closer relationships, and therefore implies that gift givers should feel happier as a result of giving an experiential gift compared to a material gift,” they continued. “This research offers simple guidance. Give an experience.”

That pretty well leaves traditional retailers out in the cold. But here are some ways retailers can make their material gift offerings more of an experience in order to grow their share of the gifting market.

Make it easy for shoppers to find the gift they want

I recently consulted with a department store about how to get a greater share of the gifting market, and I advised them to add a gifting department. The traditional department store model arranges merchandise by type rather than function. Typical shoppers have to know what they are looking for, but most gift shoppers don’t know that in the first place! Retailers can make that easier for them by creating a prominent and inspirational area where great gift ideas are displayed. Signage is critical. Make a visual splash to call out this area of your store.

A primary pain point for gift shoppers is feeling secure about making the right selection. By stocking a wide variety of gift ideas in a range of different product categories, each gift can be presented by its value and appropriateness. Use storytelling to create a narrative for each gift. Add a small selection of greeting cards that speak to the psychographics of the store’s clientele. Revitalize the lost art of gift wrapping with creative packaging.

Chefs say, “You eat with your eyes first,” a truism that retailers need to embrace if they want to enhance their gift marketing.

When gifts are the experience

Mogilner’s and Chan’s study indicated that the best material gifts are ones that also incorporate an experiential aspect because it makes them more emotionally evocative. “When recipients of a material gift focus on the emotion they feel consuming the gift, they exhibit equally high improvements in their relationship, as do the recipients of an experiential gift,” they write. Therefore, your goal as a retailer is to select products that have an experiential hook; the ones that have a wow factor that compels shoppers to touch, explore, smell, play with and interact with them in a personal way.

To merchandise experiential gift selections, pick items that can be consumed – eatables, and drinkables – or that can be used in an engaging way, like toys, books, candles or gadgets. Another option is “things that demand the recipient to touch, feel and experience them.” Items like that range from a soft plush animal to the pages of a new book. Maybe it’s a game in an open box.

According to Unity Marketing’s research, the optimum price point for a gift is between $25 and $35. Given the revolving calendar of holidays and personal gifting occasions, retailers can count on customers needing to buy a gift every one to two months.

Take it to the next level

Creating a special gift department gives every retailer the opportunity to put his or her store at the top of gift shoppers’ destination lists. The right merchandise is not enough. You must also create the experience. People can go to Amazon to buy a gift, but a store that offers great ideas and makes shopping fun can’t be beat.

Buying and selecting a gift is a challenge for most people, but at the same time they want to do it and do it right. It carries so much more emotional weight than just another thing to put on the shelf or in the closet. That’s where your store comes in. If you make the selection experience easy, positive, and emotionally rewarding, it will bind you and your customers together – a win-win.


Speaker, author, and market researcher Pamela N. Danziger is frequently called on to share new insights with audiences and business leaders all over the world. She is the author of eight books including Shops that POP! 7 Steps to Extraordinary Retail Success, and What Do HENRY’s Want?, an exploration of the changing face of America’s consumer marketplace. Pam founded her market research firm in 1992. For more information, visit unitymarketingonline.com.

Leave a Reply

Your email address will not be published.