Although the holidays are just around the corner, it is not too late for retailers to fine-tune their marketing and merchandising strategy in order to have a successful holiday season. A major element for retailers to consider for their gifting strategy is that the purchase path, friction points and mindset are different when customers are buying gifts for others versus buying for themselves.
At Loop, we are continuously analyzing everything related to gift purchases – from technology and user experience to human behavior and psychology. Research conducted in September 2015 showed nearly 50 percent of online shoppers are not necessarily purchasing gifts from a site where they would normally buy for themselves. Retailers can capture more online gift sales from their existing customers, as well as new customers, by improving the shopping experience to meet the needs of gift givers when buying for others.
Here are four ways retailers can expand their gifting strategy to capture more gift purchases online. Retailers who incorporate these strategies into their overall gifting approach will not only capture more gift-related revenue, but will also provide an improved customer experience.
Don’t let shipping and delivery deadlines limit your ability to meet shopper’s last minute gift-buying needs.
There is a significant opportunity to capture sales from the roughly 20 percent of people psychologists call “chronic procrastinators” or from those who were not planning to buy someone a gift but felt compelled to do so when they received a gift from that person.
Retailers should do whatever they can to extend the last minute gift-shopping window. Offer and highlight two-day, one-day or even same-day delivery to support “last minute” purchases (defined as gifts purchased the day before or day of the holiday). Consider offering a personalized e-card that can be sent immediately with a note stating the physical gift is on its way and the sender has not forgotten this special person.
Overall, our retailers on the Loop network have seen close to 40 percent of e-gift sales were made as last minute purchases in 2014.
Don’t assume holiday shopping ends on December 25.
The timing of gift purchases is different than what many retailers assume. Not only are a staggering number of gifts purchased last minute, literally the day before and day of an event or occasion, but a significant number are purchased after the holiday itself.
In fact, 38 percent of holiday e-gifts were purchased from December 26 to December 31 in 2014. We also saw 17 percent of holiday e-gifts were purchased in the first week of January 2015.
Continue to merchandise non-holiday products during the holiday season.
Gift-giving has become a year-round activity with birthdays representing the largest gift-giving event. In 2014, we found that 40 percent of gifts purchased between Black Friday and December 25th were birthday-related. By promoting holiday gifts along with gifts that are appropriate year-round, retailers can capture gift sales for multiple occasions.
An always-on gifting philosophy will enable retailers to capture audiences of all ages, even millennials. According to our data, 60 percent of millennials purchase gifts “just because” rather than being tied to a specific holiday or occasion.
Target new customer segments as part of your gifting strategy.
Although women typically buy more gifts than men (25 percent versus 17 percent annually based on a August 2015 Loop survey), men tend to spend more money per gift than women. Data from the Loop network shows that men tend to spend approximately 25 percent more on gift purchases than women.
The holidays are a great time for retailers to acquire new types of shoppers that might not have shopped there previously, such as male shoppers or female shoppers for male-oriented stores. Highlighting gifts that have few attributes help the buyer avoid the guesswork of gift buying, one of the major inhibitors of shoppers buying gifts.
Roy Erez is the CEO and co-founder of Loop Commerce.