Money Can't Buy Happiness, But Gifts Gladden The Soul
Harvard Business School Professor finds gifts make people happier than purchases for self. So as holiday gift shopping season approaches, retailers can make more people happy by giving them good gift selections
It is often said that money can't buy happiness, and this is true for most cases. However, writing in the September 13 issue of Forbes, Harvard Business School professor Michael I. Norton has found one important exception: those who spend money on others are happier than those who spend on themselves.
Norton conducted a study in which strangers were given amounts of money ranging from $5 to $20 and told to either spend it on themselves or on others. At the end of the day, those who spent their money on others reported feeling happier than those instructed to spend on themselves. This is in spite of consumer predictions that making more money would make them happier.
The study has important implications for the gifting market, says Pam Danziger, president of Unity Marketing and author of The Gifting Report 2010: The Ultimate Guide to the Consumer Gift-Giving Market, Unity Marketing‚s most recent study of 1,680 gift buyers.
Make your customers happy -- Offer them items good for gifting
"With the economy still on the skids and the employment picture murky, many Americans are unlikely this year to realize the bump in income they believe will make them happy. However, Dr. Norton's study shows that spending on others -- even a small amount -- can increase a person‚s happiness."
"This is an important message for those who sell gifts -- and that is almost every retailer or marketer. Gifting is becoming more important to consumers, with nearly all celebrating Christmas, Hanukkah, Kwanzaa, or some other end-of-the-year gift-giving holiday. Combine these with other popular gift-giving holidays and occasions like Valentine's Day, Mother's Day, Father's Day, and birthdays, and it is clear that many consumers are always on the look-out for the perfect gift."
"Going into this year's holiday gift shopping season, marketers and retailers have their work cut out for them," Danziger says. "Unity Marketing's ongoing research shows weakness in the affluent consumer segment -- the consumer economy's 'heavy-lifters.' These high-income customers account for only 20 percent of U.S. households but over 40 percent of total consumer spending.
"The marketers that help the gift shopper have more fun this year will win. To achieve this, retailers should put their best gift selections up front and center and make sure all sales staff are expert in helping the customer find a good gift from among the store's merchandise. They need to happily offer services to gift shoppers, such as quality gift wrapping and rapid checkout. More than ever in this tough economic climate, customers want their expenditures to make them feel good. Gifting is a sure bet in this department," Danziger concludes.
Introducting the new gifting report....
The Gifting Report 2010: The Ultimate Guide to the Consumer Gift-Giving Market
- What Gifts People Give
- What Holidays and Occasions They Gift
- Where They Shop for Gifts
- How Much They Spend
- Opportunities for Marketers to Target the Gifting Market
The gifting market -- defined as items or experiences purchased to give as a gift -- represents roughly $1 out of every $10 spent at the GAFO-type of store. Buying and shopping for gifts is a big business.
What's more, making a gift purchase is an important motivator for retail shopping throughout the year, but most especially in the Christmas holiday gift buying season which officially kicks off the Friday after Thanksgiving. Called 'Black Friday' this day is so named because it marks the period when retailers go from being in the red (i.e., posting a loss on the books) to being in the black (i.e., turning a profit).
Commenting on the importance of gift shopping to the U.S. economy, Lee Eisenberg in his book Shoptimism: Why the American Consumer Will Keep on Buying No Matter What writes: "The gifts we give, to others or to ourselves, add up to one enormous gift to the Sell Side. Each of us, on average, spends a couple of thousand dollars a year on gifts, roughly half of it during the 'Hard Eight,' that is, the eight-week holiday shopping season."
Marketing starts with understanding the customer and understanding the customer requires research
The current report is a totally new look at the gift-giving practices and shopping behaviors of Americans. Building upon previous research conducted on the gifting market, this study presents an expanded view of consumers' gift buying and giving behavior based upon a survey of 1,680 gift buyers. Intended for marketers and retailers that tap the gift market, this report presents:
- Gifting behavior by holiday and occasion: Key characteristics of the gifting market, such as on what holidays and occasions consumers buy gifts, how many people they buy gifts for and their relationship with the gift recipient, such as spouse, child, close family member, etc. and how much they spend. This report also reveals what range of products people choose for gifts, what drives their selection of particular gifts and what drives their selection of stores to shop for gifts.
- Demographics of the gifting market: How many households buy gifts, how much they spend by key demographics, and the key different demographic segments within the gifts market (e.g. HHI, age, size, composition, education, etc.)
- Gifts market buying behavior: What are the primary characteristics of the consumers' buying behavior related to different gifts? What makes a good gift? What attributes and qualities make gifters want to buy? Where do they shop for these items; how do they decide to purchase one item over another? What is the role of brand in gifting buying behavior? What is the purchase incidence and spending on key categories of gifts?
- Psychographic profile and segmentation of the gifting market: The psychographic profile of gift consumers reveals their different drives and motivations in purchasing gifts. What factors are more or less important in driving gift purchasing decisions? How can gifts marketers and retailers better understand the hearts and minds of their consumers and use that insight to capture a greater share of the consumers' gifting budget? In essence we reveal "why people buy gifts."
New data collected on gift recipients gives a whole new perspective to the gift research
This report includes brand new gifting data, such as the primary gift recipients for each holiday and occasion. For example, about half of the Valentine's Day gifts bought are intended for children. Who knew?
New data points in this study include:
- Gift recipients for each holiday and gift occasions: Not only is the number of people gifts are bought for collected, but also what the gift givers relationship is with those gift recipients, specifically gifts for your spouse/significant other; child(ren); close family member, such as mother, father, sibling, grandparent; other family member such as aunt, uncle, nephew, niece; close personal friend; child's friend; casual friend; co-worker; child's teacher, sitter; service provider, such as personal trainer, hair stylists, etc.
- Analysis of the household's primary gift givers: In the survey respondents were asked whether they were the person in their household primarily responsible for gift purchases. With over 80 percent of the sample comprised of 'primary gift givers,' this provides a view to an even more selected and engaged target market.
- Deep dive into Christmas gift and Birthday gift buying behavior: This year for the first time detail data is collected about each product gift bought for Christmas and birthday gift giving, plus where people shopped for each of those gifts. This data allows marketers to determine whether people's shopping behavior is different for these two most important gift shopping experiences and the other gift holidays and occasions throughout the year.
- Gift choices ranked as 'go to' gift category: Data is collected about 10 different gift categories, such as personal care items, giftables, consumables, electronics and more and nearly 100 individiual product and experience categories, such as candles, DVDs, women's fine jewelry, kitchenware and more. Further each of the ten categories is ranked as to whether it is one's favorite 'go to' gift category, good for most people and most occasions; appropriate for some people and some occasions only; or something the rarely or ever gift as a gift.
- Types of stores ranked as their 'go to' source for gift shopping: Nearly 40 different types of stores and other shopping venues are tracked in this report, broken into three major categories of shopping venues: General merchandise stores; non-store retailers, internet, catalogs, TV shopping, etc.; and specialty retailers, include book stores, food stores, drug stores, electronics store and many others. And each of the 38 stores included in this report are ranked by respondents as either their 'go to' destination for gift purchases; appropriate only for occasions and some people; and stores where one rarely shops for gifts.
- Brands ranked as good to give as gifts: Not only is brands that people purchase for gifts and stores where they shopped for gifts recorded, but in this survey more than 20 brands are ranked as to whether they are good to give as a gift or not.
- Internet as a source for gift shopping: For those respondents who had used the internet to buy gifts in the past year, an additional series of questions were included to gather more details about how they used the internet and their satisfaction in using the internet for gift shopping. A list of websites were rated as a source for gifts as well.
Nearly 100 Specific Gift Products Are Included
Nearly 100 specific categories of gift items within nine major categories of goods and services are detailed. The major categories of gifts include:
- Consumables (such as food, candy, wine, gift baskets, etc.)
- Clothing and/or fashion accessories (such as handbags, shoes, wallets, etc.)
- Jewelry and/or watches
- Personal care products (such as cosmetics, perfumes, bath products, etc.)
- Home furnishings and household operations products (such as home furnishings, decorative accents, housewares, home textiles, china, glass and tableware, small household appliances)
- Giftables (such as flowers, candles, figurines, collectibles, greeting cards, stationery, crafting kits and supplies, seasonal decorations, gifts for pets and/or other popular gift-type items)
- Books, Recreation Goods and other Non-digital/Electronic Entertainment Goods (such as books, sporting goods, games, puzzles, etc. Not electronics.)
- Electronics (personal electronics, such as cell phones, PDA's, MP3 players, cameras and photographic equipment, personal computers, as well as home electronics, such as video/audio, DVD's and entertainment equipment, home computer systems, Wii and electronic games, etc.)
- Store gift certificate and/or gift of cash, by type of store
- Gifts of experience (such as spa treatments, dining and restaurants, vacations, trips, travel, special events, etc. which are often presented as a gift card or gift certificate)