Online_egifting
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The Science Behind Successful Online Gifting & What To Avoid To Protect Your Brand

BY CSA STAFF

People love to give gifts.

Gift giving is more than a simple act or gesture. It’s a big part of everyday life. In fact there is a lot of research showing that giving gifts give us more happiness than we expect. In addition, research in Behavioral Economics shows that giving a “good” gift strengthens social bonds by not only demonstrating that the recipient is loved, but also the gesture of getting something they truly want. The strengthening of a social bond is difficult to replicate, and results in strong, positive emotions for both the giver and the recipient, which can then extend to the gift’s merchant and brand.

But giving a good gift is often easier said than done. What if it’s the wrong size? Or color? Studies have found that this high risk can drive many to choose neutral gifts like flowers or wine, doing little to strengthen the bonds in a relationship. Some chose not to give at all.

Some others compromise with gift cards. Scientifically speaking, gift cards are too close in the spectrum to giving money, significantly reducing the excitement for both buyers and recipients and tarnishing the important social bond. And while gift cards make sense occasionally, studies show they do not strike the right balance of thoughtfulness. Most consider them too transactional: too little meaning, not enough attention and emotion.

Growth in e-commerce is driving online shoppers to demand that retailers also accommodate impulse and instant-purchase behavior — a main driver for online shopping — including enhancing and improving the experience of gifting. To this end, major retailers and brands like Macy’s, Saks Fifth Avenue, Bergdorf Goodman, Coach, and Neiman Marcus have adopted product e-gifting solutions. In fact, it's estimated that the product e-gifting category represents many billion in sales annually. Brick-and-mortar and e-commerce retailers alike are becoming aware of this significant, unrealized category as an incremental business driver, but some still have questions about its fundamentals.

As product e-gifting becomes reality, there’s a clear understanding that retailers need to accommodate a dedicated shopping service and check-out for buying products as gifts rather than a self-purchase.

After looking into product e-gifting, it was clear to me that we have to examine the benefits of e-gifting, not just as efficient exchange of gifts, but also as mechanisms to improve the relationship between the buyer and the recipient, as well as with retailers and brands offering the service.

This past February, I conducted several studies that compared and tested existing approaches to product e-gifting that evaluated how a dedicated, end-to-end gifting experience compares to an approach that relies on an existing check-out flow to understand and explore differences as to how consumers respond to the distinct experiences. These studies focused on core fundamental differences, intentionally omitting direct reference to the type of gifts, price levels, brand names, etc.

What I found was that while product e-gifting can be incredibly useful to both customers and retailers, if done incorrectly it can hurt the relationship between the buyer and the recipient and erode the customer-brand connection.

Below I offer several observations and data points that are important to take into account in order to deliver a successful e-gifting experience. These points strengthen the buyer-recipient social bond and minimize risk, while protecting the consumer-retailer relationship, and drive a successful gifting program.

Experience is key to success.

Buying and receiving gifts are very different than self-shopping. Presenting, or leveraging an existing check-out is too transactional, degrading the emotional gift receiving experience. To drive value described above, retailers should avoid requiring the gift recipient to “check-out” their own gift, which was rated ‘very dissimilar’ to traditional gifting, and resulted in experiences that were rated three times less delightful by consumers when compared to experiences that had a dedicated, end-to-end gifting experience.

Hide the price.

Not surprisingly, consumers were uncomfortable seeing the price when receiving an e-gift, with discomfort increasing for higher-priced gifts. Experiences that didn’t display the price were found nearly three times more delightful than gifts that displayed the price, directly correlating to more consumers’ being ‘highly likely to recommend to a friend.’

Accommodate price fluctuations.

Pricing of items being gifted can fluctuate between the time of purchase and redemption. That a buyer or recipient could be left holding the bag registered as a “high concern” with strong negative implications. Being asked to add money in order to accept the gift hurts the social bond between the buyer and recipient, as well as between the consumers and the merchant.

Forget about registering the gift recipient.

Many consumers in the study rated ‘concerned’ when a gift recipient needed an online account with the merchant to receive the gift, noting it would degrade the experience. Redeeming a gift without an account will foster good will, and make recipients more likely to return.

Streamline and keep it simple.

A streamlined and natural e-gifting experience was rated more than four times more preferable than a cumbersome experience. Implement fewer screens to ensure buyers don’t “give up” before completion of an e-gifting transaction.

As adoption of technology fuels product e-gifting, retailers must understand and recognize that the basic fundamentals of why and how we give still need to apply. Very different than gift cards, there are higher standards, higher social recognition, and higher expectations when consumers are buying and receiving thoughtful products as a gift.

Positive e-gifting experiences can act as a catalyst for more repeat purchases than even traditional shopping. Offering a true experience for consumers will enable retailers to benefit from additional revenue through an entirely new channel, and strengthen bonds with their customers. The best product e-gifting experiences needs to support the fundamentals of true gifting to strengthen social bonds between the giver and recipient and achieve the value and benefits that it holds. And these platforms have to take these elements into account.


Dan Ariely is a professor of psychology and behavioral economics at Duke University, TED speaker and the New York Times bestselling author of "Predictably Irrational."

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Mobile_wallet
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Survey: Mobile wallet adoption has flatlined

BY Deena M. Amato-McCoy

Mobile wallet usage in the United States remains small, and shows no signs of increasing anytime soon.

This was according to “PYMNTS/InfoScout Mobile Payment Adoption,” a new report from PYMNTS.com. The survey, which was conducted in March 2017 among more than 7,655 consumers, said less than one in 20 consumers who have one of the main mobile wallets (Apple Pay, Sam-sung Pay, and Android Pay) use it regularly.

The study also showed the percentage of people who have tried mobile wallets has flatlined. The only exception is Apple Pay, which has seen its usage go down for the first time. However, Apple Pay leads the pack when it comes to the number of consumers that have tried it at least once (22%), compared to Samsung Pay (15%), and Android Pay (less than 10%).

However, those who have installed Samsung Pay have used it at mer-chants that had supporting technology (4.5%). Apple Pay came in a close second at 4.0%, while Android Pay trailed behind at 1.1%.

One product garnering more attention is Walmart Pay. After eight months on the market, 3.3% of shoppers installed the app on their phone, com-pared to Apple Pay (available for almost three years) and Samsung and Android Pay (both on the market for almost two years), all of which have seen fairly flat usage for their entire availability, the study reported.

“So far, mobile wallets aren’t attracting much consumer interest,” Karen Webster, CEO of pymnts.com said. “The lesson, though, isn’t that wallets are dead. Rather, the providers and innovators really need to focus on features that will get consumers, and merchants, excited.”

What is to blame for the sluggish adoption among consumers? Shoppers reported they are happy with their current payment methods, such as plastic cards and cash. One bright spot for mobile wallets is that people are becoming less worried about security, according to the study.

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Williams-Sonoma Q4 profit tops Street

BY Marianne Wilson

Williams Sonoma Inc. on Wednesday reported adjusted fourth-quarter earnings above expectations and said its board of directors authorized a dividend increase.

In a separate announcement, the company said Sandra Stangl, president of its Pottery Barn brands, will resign from the company March 31.

The retailer earned $145 million, or $1.63 a share, in the quarter ended January 29, compared with $141 million, or $1.55 a share, in the year-ago period. Adjusted for one-time items, Williams Sonoma earned $1.55 a share, beating analysts’ estimates of $1.50 per share.

Sales fell to $1.582 billion from $1.586 billion a year ago. Online revenues increased 2.2% to $809 million from $792 million in the year ago-period. E-commerce generated 51.1% of total company net revenues the fourth quarter and 49.9% of total company net revenues in the full year.

For the full fiscal year, net revenues grew 2.2% to $5.08 billion, versus $4.97 billion last year.

“In 2016, we delivered revenues of over $5 billion, which included another year of double-digit growth across West Elm, our newer businesses Rejuvenation and Mark and Graham, and our company-owned global operations,” said CEO Laura Albers. “Additionally, from an operational perspective, we executed one of our best holiday seasons and delivered an improved customer experience which is at the center of everything we do. Entering 2017, we will continue to improve performance and increase our competitive advantage, with a focus on innovation in e-commerce, our products and service, and the retail experience. We will also remain relentlessly focused on operational excellence throughout our supply chain, driving strategies that will improve our customers’ experience across all of our brands.”

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