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01/27/2021

Fulfilling Consumers’ Need to Connect with Others in a Virtual World

Monika Kochhar
Monika Kochhar

Gift shopping is arguably one of the most aspirational, thought-filled and human-centered of all shopping experiences. The gift is social currency, a physical manifestation that symbolically communicates feelings of love, affection, caring and concern from giver to recipient. That’s why, at its best, a gift is so thoughtfully chosen and so happily received. And this past year, as social distancing kept people far apart, gifting took on even greater importance as a means of expressing a close connection between people. 

Apart from being a shopping experience that’s more about the other person than oneself, gifting also presents a unique opportunity for retailers to connect with two parties in a single transaction. An emotionally satisfying gift shopping experience for the giver and an equally satisfying fulfillment experience for the receiver paves the way for a retailer to develop two separate customer relationships in one go. With the lifetime value of a customer becoming an increasingly important retail metric, the retailer’s reach can increase exponentially – a positive gifting experience relayed to others through word of mouth can only be a good thing.

Across the retail landscape, retailers that provided goods to satisfy essential needs during the Covid-19 pandemic via online, whether through delivery or pickup, have prospered. As has been well documented, those without that capability quickly found themselves faltering. Most aspirational shopping took a pause, gift-giving being an exception, whether for Mother’s Day, birthdays or other special social occasions, until the holiday season rolled in, and gift-giving took a front row seat. Ecommerce capabilities played an even more critical role – selecting, sending, and hoping that that the act of online gift-giving didn’t result in a return.  

Going into the 2020 holiday season, global management consulting firm Deloitte found that about 60 percent of consumers preferred to do their gift shopping online.  And it looks like they did. Mastercard Spending Pulse reported that e-commerce sales increased 49% year-over-year in the 75 days leading up to Christmas. That is compared to the Census Bureau, which reported that e-commerce sales for the whole year increased by only half as much, or 22 percent. That means a huge volume of online sales were loaded into the final three months of the year.

Given that huge imbalance, it’s safe to say that many retailers were unprepared for the onslaught of holiday orders, much as they had been unprepared, early in the pandemic, for their customers clearing out their shelves. Social distancing aside, how many retailers this holiday season were able to simply satisfy, let alone delight, both purchasers and recipients of gifts in this most shared of heartfelt experiences, during this most challenging of times? Too few, I imagine.

Predictably, purchasers’ experiences were tarnished by worries that the gift wouldn’t arrive on time, that it wasn’t the right choice and needed to be returned, or was presented in a less-than-delightful way, or worse, perhaps not even reach its rightful recipient. Compare someone’s excitement in being presented with a beautifully wrapped gift to receiving a soulless gift card mainly messaging monetary value, or a random item in a cardboard box.

Their course set by long-developing trends and accelerated by the pandemic, retailers can expect gift shoppers’ decisive flight to online to continue into 2021 and beyond. They would do well to make sure their e-commerce gift shopping and delivery systems support the highly specific needs that gifting represents.

Chris McCann, CEO of 1-800-Flowers, the nation’s largest gifting company and one that does virtually all its business online, said in a recent address to stakeholders: “Prevailing sentiments have emerged from these challenging times. People’s need for expression, connection and celebration with the important people in their lives has increased.”

Retailers are thus put on notice that gifting, like all shopping, has irrevocably changed as a result of the pandemic. Online increasingly being the destination of choice for many consumer purchases, this will clearly include gifting. Online shopping carries possibilities for convenience, selection and availability that’s missing in many in-store experiences. Conversely, physical retail’s ability to allow customers to touch, feel and experience instant gratification are hard to replicate in an online environment. The online gifting experience must rise to the realm of the physical, even surpass it.

How can retailers make the most of these new consumer expectations? First, they need to recognize that gift purchases are more than just another sales transaction—they are two-way transactions that carry a deeper meaning and amplify a personal connection. To fully realize the exponential opportunity that gifting represents, retailers need to do more than simply make the transaction happen – the smart thing to do is to delight both parties.

In the business of retail, we get so caught up with the mechanics of sourcing products, moving them into place, and getting them ready for the next customer that we often forget the ultimate purpose of what we do, helping customers fulfill their needs, both essential and aspirational.  

Monika Kochhar is CEO and co-founder of SmartGift, a state-of-the-art platform for gifting, corporate incentives and rewards. She can be reached at [email protected].

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