The science of gifting: a comprehensive guide for marketers

If buying holiday gifts for loved ones was easy, people wouldn’t leave it to the last minute. And just like holiday shopping itself, for marketers preparing for the festive season, it’s best to wrap your head around gifting as early as possible.

After all, the holiday season is a crucial time of year for many companies. In fact, according to the National Retail Federation, 19% of annual retail sales come from purchases made in November and December, the most out of any other time of year. 

But exclusively targeting your core customer base during the festive season won’t cut it. Gifting is a different ball game, and brands can’t rely on their year-round marketing strategies to tap into the gifting crowd. 

That’s according to Daniel Todaro, chief executive at retail consultancy Gekko. “Brands may have their segmentation and targeting down to a tee, but when it comes to gifting all bets are off,” says Todaro, who works with some big-name brands like John Lewis and Currys. “Ultimately, you need to be talking in spaces where the gift-givers will be. So, taking a look at how brands that are popular with demographics other than your own approach their marketing can give marketers a good steer in the right direction.”

Make some noise

Getting in front of these new customers is key. That’s where online advertising can help. According to a survey from Nano Interactive, 23% of consumers find out about winter-sale deals through online advertising.

Miruna Sfat, marketing director at ecommerce agency Williams Commerce, whose clients include brands like Moet Hennessey and BMW, recommends investing in paid search and a strong SEO strategy to get on the radars of gift-givers, so brands can increase their exposure as people start browsing for inspiration. 

“It’s also important to be prepared for milestones within the season such as Black Friday. Even if aggressive discounting isn’t right for your brand, people will naturally be in buy-mode in the run-up to this pre-Christmas discount day, so doing something timely that aligns with your brand values can help businesses capture a share of these sales,” says Sfat.

But it’s not good enough to just work on brand discovery; understanding buyer intent is also important. Remember that gift-givers will be motivated by the preferences of who they’re buying for - and not necessarily their own needs.

Keep them coming back

While those buying gifts may come from a broader customer base than your usual patrons, a good shopping experience just might be the key to creating loyalty. 

“Post-purchase engagement is the essential component that makes the difference between a one-time gifter and a long-term customer,” says Richard Chapple, co-founder and chief growth officer at retail consultancy The Growth Foundation. It’s always a good idea to touch base with customers once the dust settles. Send follow-up emails to both gift-givers and recipients, offer discounts, loyalty programme memberships or early access to new collections to retain their interest in your brand.

The Growth Foundation worked with ready-to-drink cocktail brand NIO Cocktails to include a ‘Peel and Reveal’ card in every cocktail gift box to encourage recipients to become direct customers. “There’s a mixed roster of prizes, ranging from gifts upon purchase to higher-value items like a £100 gift card. They all direct the recipient to the website to redeem their prize, thus capturing them in our CRM. This wins us an order conversion rate of around 25% of cards sent,” says Chapple.

By focusing on targeted messaging and emotional connections, while considering the long-term customer potential of both gift-givers and recipients, marketers can make the most of holiday sales and set the stage for future growth. This season is an opportunity to not only boost revenue but also to introduce your brand to entirely new audiences who may stick around for the long haul.

Sally Whittle

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The holiday season represents a golden opportunity for businesses to drive up revenue, as the world goes gift shopping. But how can email marketing help brands to stand out during peak season, when up to 10 billion emails are being sent on peak dates like Black Friday? 

It might sound challenging, but the good news is that gift buyers are actively looking for inspiration and deals. In fact, Intuit Mailchimp reports that emails sent between Thanksgiving and Christmas can see a 45% higher click-through rate than at other times of year. To generate a successful holiday email campaign, companies must start planning in advance. This means understanding what your brand objectives are, what product you want to push and how you will measure your performance. 

Second, brands need to consider the health of their existing email marketing list - and how they will use the holiday season to build up an even better list for the year ahead. “In our first year of business, 40% of our revenue came at Christmas through our newsletter,” says Lauren Selwood, founder of stationery company Short Stuff. “Since then, we have tracked our newsletter sign-ups very closely, and we start to offer ramped up discounts as an incentive to sign up from the end of the summer.” 

Today, 30-50% of Short Stuff’s holiday sales still come through its email marketing, and planning for the season starts a full year ahead. “We use data insights from the past four years to understand what people want to buy, and what we’ll promote in the newsletter,” she explains. For example, over the past two years, customers have purchased the company’s calendars as gifts in large numbers, so this year, Short Stuff will launch gift bundles built around calendars. “We hope it will drive up the average order value, by providing new customers with the opportunity to save a little money by buying a calendar with other items that will make a great gift,” Selwood says. 

Pricing is important but not the only factor in the success of holiday email marketing campaigns. Campaigns can play into time sensitive offers by mentioning final delivery dates or exclusive offers, without sacrificing holiday sentiment. Tapping into emotive concepts or words can be particularly effective during this time of year and marketers shouldn’t shy away from the personal side of the holiday season. 

“We don’t necessarily try to compete on price, but focus on things like the opportunity to have a special experience with family and friends at Christmas,” says Chris Oatway, marketing coordinator at The Gibbon Bridge Hotel. The hotel has launched a series of gift-friendly experiences for the holiday season, including murder-mystery weekends, wine tasting evenings and even craft classes. “We offer a range of vouchers that can be used up to six months later, which are promoted through email marketing in the run up to Christmas,” says Oatway. 

The hotel has a segmented mailing list that allows for personalised emails to customers who express an interest in gift ideas. “We’ll start emailing details of potential events and experiences about six months in advance and follow up with gift-themed messaging in the autumn, focusing on gift ideas for different family members,” he says. “We can track who clicks on emails, then follow up with offers as we get closer to December.” 

At Short Stuff, Selwood says that email flows around the holidays are segmented and tailored to new customers. “At Christmas we try to share more about how we work and who we are, and what it means to us when someone buys for the first time,” says Selwood. “At the same time, we change the email flow so that the customer gets a thank you email after dispatch, then a ‘we miss you’ email after 30 days. We’ll try to encourage them to go to our TikTok or Instagram, so they’re part of our world next time they want to make a purchase.” 

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Gifting is a national obsession. Some 55% of UK adults expect to spend most of their 2024 Christmas budget on gifts for others and Google trends shows that the search term ‘Christmas presents’ generates volume as early as July. Over half of gift givers (51%) also start buying presents for loved ones from September, with activity peaking in November. 

Catherine Janssen-Boyd, professor of consumer psychology at Anglia Ruskin University, says it’s a passion that’s fuelled by a neural pathway in our brains. “It’s linked to our reward systems,” she says. “When we see sale signs or we buy a gift, our brain makes us feel like we’re being rewarded, especially if we buy something that’s a bargain.”

UK consumers are also willing to spend vast sums. Shoppers aged 35-44 (£723.60) and over 75s (£607.60) spend the most on Christmas presents, with the 65-74 (£486.60) and 55-64 age groups (£489.60) spending the least. It isn’t just the festive period that tempts consumers to spend. Black Friday yielded £13.3bn in sales in the UK last year, while Cyber Weekend generated £3.45bn. Data from digital retailer Very found that toys, gifts and beauty (+8.8% YoY) and electrical (+7.4% YoY) were the standout categories in 2023.

Ben Shaw, Chief Strategy Officer at marketing communications agency MullenLowe, says the fear of missing out (FOMO) is a key psychological driver for consumers. “Gifting is an emotional moment,” he says. “There are early birds who plan their purchasing in advance, but research around the peak season shows that a significant portion of consumers are open to impulse buys, with 36% of consumers identifying as spontaneous winter sale shoppers."

For marketers, FOMO presents an opportunity to appeal to impulsive shoppers. Time restricted offers and sale items trigger ‘system one’ thinking, a term used to describe the quick and intuitive parts of our brains. “System one reacts to perceived scarcity, perceptions of deals and social proof,” said Nathan Novemsky, professor of marketing in the Yale School of Management. This mode of thinking can then result in a phenomenon referred to as ‘shopping momentum’ in which shoppers enter physical or online stores with only a few specific items in mind but proceed to buy multiple extra products.

Gamification is another tactic being used by brands in an attempt to connect with consumers. “A really good example is Casper’s mattress puzzle ads that were put inside trains in New York,” says Janssen-Boyd. “They kept travellers entertained as they tried to solve the puzzles whilst travelling. Volkswagen also created a Twitter race - each time a follower tweeted with a specific hashtag it would put them at the top. Whoever was first when the race stopped won a car. That campaign resulted in 150,000 tweets in just eight hours.” 

But gamification doesn’t always build trust and sales. In 2022, it was estimated that American businesses lost $700m on failed gamification projects. Trust is increasingly hard to build. Intuit Mailchimp’s 2024 report Brand Trust in the Age of Information Overload reveals that 32% of consumers trust brands less. To connect with consumers during gifting periods ahead of their competitors, marketers must adopt a personal approach. Nearly half of consumers surveyed (48%) crave entirely human-made brand communications, while 38% say they are comfortable with human-made content supported by AI-led insights.

As the peak gifting season approaches, these insights could provide a formula for marketers to win the hearts and minds of consumers by creating human-generated campaigns that use AI to reach the right audiences with precision at scale.

With Black Friday fast approaching, Alex Stewart saw a problem on the horizon. “Customer acquisition costs have soared by 60% for almost all e-commerce businesses in recent years,” says the founder of eco-conscious travel goods brand OneNine5. “This means many companies actually lose money when a customer buys their first product.”

The reason for this is the rising costs of digital advertising via search engines and social media channels, such as Facebook and Instagram, as an increasing number of businesses battle for online visibility. Stewart needed to come up with an idea to make it easier for customers to find thoughtful gifts for loved ones and increase the value of their first orders.

“We decided to drive traffic to our website via paid media and aimed to get people to sign up to our newsletter,” he explains. “We then retargeted these same people with messaging that directed them towards Black Friday bundles. These were discounted but still promoted a higher average order value versus trying a customer buying one product alone.”

The positioning of the bundles was also key. Commuter and travel bundles appealed directly to the common needs and lifestyle of a typical OneNine5 customer and made it easier for gifters to assemble their own selection of individual items. “We were struggling to break even when winning a customer via paid media, but with the bundles the same customers became profitable with their first order, which was a game changer.”

Thinking outside the box was also the secret to Hemapriya Hatesan’s Father’s Day gifting campaign. She came up with an ingenious idea for her male wellness brand targeted at women searching for gifts for their husbands. “I created a campaign that enabled women to send their husbands a ‘fit father’ wellness drink to his office address,” says Hatesan. “But the gift was personalised with a message from their child. We then asked them to post a picture of the father, child and wife with the gift and tag us on Instagram. In return we gave them a special discount. That campaign generated a lot of reach for us.”

Innovation also comes in the form of creating new gifting moments. A conversation between Gavin Paye and one of his suppliers in the Philippines created an exciting opportunity for experimentation. “He mentioned that 12th December is a really common gifting date in South East Asia - it’s almost an alternative Black Friday in the build up to Christmas,” he says. “We decided to do a promotion on the same date with 12 types of hampers available for a discount. That was one of the best performing campaigns we’ve ever had.”

As another Black Friday fast approaches and consumers begin their Christmas shopping, marketers that engineer innovative campaigns to tap into the emotions of specific audiences will create their own gifting strategy success stories.