When is a gift more than a gift? When it comes to brand/customer relations, gift purchases can enhance customer’s public brand engagement, foster brand loyalty, and fuel future purchase intentions. In turn, this can lead customers to make more frequent, more diverse, and higher value purchases from the gifted brand. While encouraging gift purchases creates instant returns without increased costs, it remains a widely overlooked area in marketing research. The authors explore the links between gift purchases, and customers’ attitudes toward the brand and future purchasing behavior using two different scenarios. They find that after purchasing gifts, customers purchased 63% more in the following year compared to a sample of customers who purchased for their own use, and that this boost was more significant in new consumers.
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What You Need to Know
Marketers can effectively use gift purchasing to leverage relationships with consumers, increase customer engagement, and drive sales.
Need to know:
- Gifting has long been recognized as a way to strengthen social ties, but marketers can use gift purchases to initiate and relationships between customers and brands.
- Why? Customers may engage deeply with the gifted brand, which promotes future brand loyalty and purchasing decisions.
- Managers should identify products to position as gifts and promote them as such, targeting new rather than experienced customers.
Gift giving is an effective means to strengthen interpersonal relationships; it also may initiate and enhance customer–brand relationships. Through a field study conducted with an international monobrand retailer of beauty products, a combination of propensity score matching with difference-in-differences estimations, and two experimental scenario studies, this research demonstrates that gift buyers spend 63% more in the year following a gift purchase than a matched sample of customers who purchase for their personal use. Specifically, gift buyers increase their purchase frequency (25%), spend more per shopping trip (41%), and engage in more cross-buying (49%). The sales lift is particularly pronounced among new customers. Identity theory suggests customer gratitude and public commitment as mediating mechanisms. Gift purchase design characteristics (i.e., assistance during gift purchase and branded gift wrapping) influence the strength of the mediating mechanisms.