By John Grech, Head of Retail Partnerships at Loop Commerce
Valentine’s Day this year looked a lot different than 2020. Yet, in many ways, this year’s holiday possessed a level of normalcy for gifting. Many retailers tweaked their playbooks over the last 365 days to meet the influx of digital and curbside shopping demands. Mother’s Day 2020 required building a new playbook that would be tested during 2020’s critical winter holiday shopping season, but it was this year’s Valentine’s Day that helped to prove digital gifting enablement was not a pandemic fad and is now a staple of many retailers’ ecommerce operations.
Unique Gifting Journeys
What we have learned from working with our partners is that people shopping for gifts are on their own unique gifting journey, and that both of us — retailers and technology providers — must embrace that shopping for a gift is different than shopping for yourself. Additionally, Valentine’s Day is distinctly different from Christmas, Hanukkah and the winter holiday rush for many reasons, the most obvious is that the impact radius is much smaller, which means that Valentine’s gifts are personal and the number of people you buy gifts for that holiday is less than December holidays.
That said, Valentine’s Day is a holiday known for last minute gifters and also a huge opportunity to expand into new segments. For example, a handbag retailer can double down on male audiences who are shopping for products they are likely less familiar. Armed with data insights, they can know that this shopper may shop late, spend more and be willing to pay a premium to a brand that makes their life easier by guiding them through the gifting journey. This is an example of a messaging and journey design where retailers who tuned their gifting playbooks to simplify the journey for this customer segment were able to win big. Our GiftNow retailer partners saw their total gifting sales for Valentine’s Day increase by 97.5 percent compared to 2020. Average Order Value increased from $119 to $125, and year-over-year and purchase conversion increased by 81 percent.
Using GiftNow’s Network Insights, we are able to glean some additional learnings. For example, women typically buy more gifts than men, but for this year’s Valentine’s Day, men bought more gifts than women at a 2:1 ratio (66% vs 33%). Furthermore, men spent 40 percent more on average at $155.40 compared to $111.19 pre-tax average order value. This translates to new audience opportunities for brands and retailers who predominantly serve a female audience — they just need to rethink who their customer is during these gift-purchasing times.
GiftNow also provides the ability to alter or adjust your gift, for size or color for example, or exchange it altogether for another product. For Valentine’s Day, exchange rates showed that men were more likely to alter their product than women. For women, 75 percent kept the gift as-is, 10 percent exchanged it completely, and 15 percent altered it. For men, 64 percent kept it as-is, 12 percent exchanged it completely, and 23 percent altered it.
From a retailer’s perspective, the benefit of this is that there is no physical exchange or return as the gift is not shipped until the recipient has selected what they actually want. Not having to deal with returns or exchanges can be a huge cost saver, plus it puts the customer in control. After all, the recipient of the gift is also a customer now too. Overall, it was a remarkably successful holiday for digital retail, at a time when brick- and-mortar locations often continued to struggle to operate on adjusted schedules amid government restrictions, and an especially successful holiday for those who supported shoppers with digital experiences specific to their gift-giving journey.
Communicate Based on the Journey
For retailers, embracing an individual’s gifting journey begins and ends with effective communication. We have seen retailers engage gifters with broad messaging that did not speak to the gifters’ intent, the unique challenges of the shopping use-case, and did not consider that their gift-shoppers are probably a different segment than their typical self-shopper. Often messaging put more of the onus on the gifter to figure things out for him or herself. This year, many of our retailer partners placed additional emphasis on personalization of their customer communications to make the gifting journey even easier and more special for both gifter and recipient. For example, one of our leading jewelry retailers created a gifting campaign targeting male shoppers that mimicked the high-touch, personal experience they would get if they were in the actual store.
In assessing the broader retail industry, there is certainly room for improvement when it comes to the gifting journey and digital gifting optimization. Retailers are making strides in better understanding their gift shoppers and are creating more personalized gifting experiences to support their unique journey.
What Stood Out
Between the winter holidays and Valentine’s Day 2021, two things stood out most: We expected year-over-year gifting growth to accelerate, and it did. The pandemic has caused shoppers to experiment with new ways of buying things, both for themselves and for others, and new habits are forming as a result. When we are able to return to the new normal, we expect many of these behavioral changes to stick, which represent an opportunity for retailers to optimize for the new normal.
- Simple is better and less is more. New shoppers will want simple so do not make the gifting or shopping journey overwhelming. Making it easy can help build customer confidence in the transaction and ultimately, loyalty and make you a gifting destination.
- Find ways to win micro-moments. Become that reliable go-to gifting destination that differentiates you from the mass merchants who often will win on price and promotion. In an ecommerce environment, you are not in a mall. Customers have to find you and are coming to you for a reason. Gifting can be a weapon to win those use cases, especially if you make it simple for the gift shopper to be a successful gifter.
Retailers need to view themselves as a gifting destination year-round. To make themselves the most ideal gifting destination and ensure a differentiated gifting experience, retailers should assess their true gifting maturity. GiftNow sponsored the 2020 Gifting Index recently published by the e-tailing group, which is based on data compiled from 50 major retailers on their gifting operations based on four different gifting categories. Close to half of the retailers evaluated were “Gift Average” and only 14 percent were considered “Gift Rich.” Clearly there is room for growth and the period between now and Mother’s Day is the perfect time for small businesses to do a holistic gift assessment and identify opportunities to improve their gifting experience and, ultimately, their revenues.