Episode 7: As budgets tighten, Aussie gift givers are seeking more personalisation

In this episode, Amie speaks with Helen Marsh, co-founder of  gift flick, about gift giving in Australia, especially around the recent research gift flick has done into the financial challenges now faced by consumers.

Transcript

Copy Transcript Copied

Intro:

Coming up on this episode of Retail Untangled. So essentially, the more thought that's put into the gift, the more customisation, the greater the emotional value between the gifter and the receiver. Convenience is still stated as the number one reason why customers are shopping online again in droves. Compelling online presence is going to be key to performing well this year. 

Amie:

Welcome to Retail Untangled. My name is Amie Larter, and this is the podcast where we speak to retail industry experts and find out business hacks that have helped them succeed. You won't find these gems anywhere else. And we have some superb stories from the Coalface, as well as helicopter insights from retail industry leaders.

In this episode, I speak with Helen Marsh, co-founder of instant digital gifting service gift flick. I start by asking Helen to share some of the high level insights about gift giving in Australia, especially around the recent research gift flick has done into the financial challenges now faced by consumers.

Helen:

Coming up to Christmas, retailers and consumers obviously have a lot to think about this year with this ever increasing cost of living, gifts are likely to become a complex and potentially emotionally charged task for the consumer this year. And so obviously we were really interested to uncover. What's the average Aussie thinking about?

What are they planning on doing when it comes to gifting, which is why we partnered with Inside Retail to survey 750 Aussies this September. And it was interesting to uncover some of the insights. There's five things I thought would be useful to share for anyone that's working in retail and e-commerce.

The first one is that consumers are cost cutting. No surprise there. We've all been reading all of the insights over the past couple of weeks. What is really interesting is that every retailer will probably be impacted by the shift in consumer buying behaviour. There's no category that is immune. The second one, though, that is really interesting is that personalising of gifts are ranking really high in terms of consumer appeal.

And so we decided to dive into, well, when we say personalisation, what do we really mean when it comes to gifting? What's really clear is the consumer is interested in personalising the gift item itself when, where they can. They're interested in the wrapping of the gift item, and they're interested in how they can personalise the delivery mechanism.

So it's really interesting that enhancing the emotional connection between the gift giver and the receiver looks to be an interesting strategy for retailers this year as an option to simply cutting the price of items. So personalisation is definitely something for everyone to be thinking about this year.

The third insight that we heard from the consumers that we surveyed was that they're looking to shift to more practical gifts and gift cards obviously rank high up in, in terms of practicality. These are things that could add value to consumers or the recipient's lives in a time when they may be a little bit stretched.

So gifts that are useful ranked really highly and interestingly were less subject to the customer's focus on price. The fourth thing we learned is that different age groups have got different preferences when it comes to gift buying, which I guess is not a surprise, but some interesting insights in the survey that retailers might find useful, particularly for the 18 to 24 year olds.

They're saying this year they're really looking for experiences. They're looking for clothing and they're looking for sports items-that ranked highly as well in the people that we spoke to. Again, I guess things that clothing and sports items like really useful, practical and experiences that might be something that they just can't afford the luxury of doing for themselves.

So again, pretty interesting if you're a retailer and you're thinking about your marketing strategy for different segments. And the final and fifth insight was with regards to “where are they going to be shopping?” So online shopping, no surprise, continues to be massive. I think the latest piece of data I looked at was 82 percent of Aussies are shopping online.

But what is interesting is that they're tightening their wallets as well when they're shopping online. I think over the past couple of months, we're looking around about a couple of percentage points down year-on-year. Online channels are really primed for enabling personalisation, of course. And we know that personalisation is the thing that will draw that emotional connection and potentially be a good tactic to, to not just think about cutting prices, so personalisation through writing a gift message or potentially using instant digital gift wrapping service like gift flick that we provide or physical wrapping of gift items. You know, there are things that are really interesting for the retailer to consider. The other thing that came up in, in the survey data was interactive product guides online. So there's a range of different ways in which a retailer could consider how they can offer an interesting experience this Christmas without simply cutting the price.

Amie:

Yes, that makes sense. All right. So if we can start, and thank you for unpacking those first five points, because it's kind of a very good top level view. If we can start at value. So the survey highlights that consumers are focused on value when it comes to gift giving. How is this focus on value impacting the way people approach giving gifts and what strategies can retailers adopt to sort of address this trend?

Helen:

I think there's one thing to be clear on, like, customers might be looking about value but gift giving is so deeply ingrained in our culture, you know it's been here for thousands of years. So it's definitely not going away. 90 percent of our survey respondents told us they would be making a greater effort to get better deals this year versus last year.

So we've got to be mindful of that. 83 percent of our respondents said they'll be cutting back on non essential spending. And 60 percent said that cash back offers will be enticing them to shop online. So it is really clear shopping for deals, ensuring that you get the best price, focusing on value is top of mind.

And of course, having a really compelling online shopping channel is a great enabler. And obviously the destination for the consumer, as I mentioned before, online channels are also really primed for enabling a personalised customer shopping experience, which is much harder to do in bricks and mortar.

Some of those experiences, when we look across the whole market, they are often available for a retailer to implement quite quickly, quite simply and at affordable prices. So when margins are in focus, it is perhaps quite interesting for a retailer to look at personalisation strategies as a more cost-effective choice than potentially looking at a cashback strategy, for example.

We're expecting cyber weekends this year to be really enormous, of course, I'm sure everyone is forecasting the same. And I think for shoppers who are well organised, they'll be using it as an opportunity to get the best price for their Christmas gifts. But of course, there are many people who are not that well organised who will be shopping last minute and will be sniffing around for deals, but potentially not able to get them all and needing to deliver gifts to friends and family when the physical item might not arrive in time for the big day.

And that's where services like gift flick, since digital gifting services is really key. 

Amie:

It's key for someone like me too, because I am sitting in the non organised. So the importance of personalisation in gift giving, it's sort of emphasised in the survey findings, it's something that's obviously very close to your heart in regards to what gift flick's all about. Can you elaborate on how personalisation can enhance the emotional impact of gifts and drive online sales without resorting to the price reductions that you've mentioned?

Helen:

So it was clear from the survey that personalisation did rank highly in terms of consumer appeal. And then we would dive into that.

So what, what are the, what's the survey respondents telling us around personalisation? It was interesting because some of the data points here, 43 percent of people said that they saw appeal in being able to personalise the physical item. 39 percent of them told us the ability to write a personal message with a gift is, is important to them.

30 percent being able to choose gift wrapping. 31 percent being able to open a digital gift card to see their present whilst the real one is on its way. And 29 percent they're really interested in interactive guides to help them choose. So some great ways in which retailers can give their customers a greater emotional shopping experience Again, rather than focusing on price alone.

So if you're a retailer and you're thinking, well, that's all well and good, but how on earth do I get started on creating this kind of experience and have I still got time? Here's some examples that we've been looking around in the market of how you might tackle some of these things. So starting with the personalisation of the item itself, obviously it's the, it's the really important one.

So some of our clients here at gift flick, one is Country Road. So they offer embroidery and embossing on physical items, lots of retailers are doing that these days But the experience to order for the consumer, the experience to order online is, you know, just a couple of extra clicks of a button and entering some data and, and the retailer is of course able to collect a fee for that.

So for the, for the gifter, it demonstrates that far greater level of thought. I recently used Country Road service, you know, it took me under a minute to personalise a sweater for a friend. So, so those things, there's some complexity, of course, in doing that and fulfilling those orders, but those things are really interesting to look at.

The second thing is then personalising the gift wrap. You know, with this massive increase in online orders over the past couple of years, whilst there's an opportunity when it comes to gift giving, it prevents a problem for the retailer in appropriately packaging those online items, particularly if you're delivering them direct to the recipient.

And of course, shipping them to arrive in time for the big occasion. It was pretty challenging for many retailers last year and our, and our dear friends who were running delivery businesses. So those kinds of things are often out of the control of a retailer, yet they bear the brunt of the consumer's dissatisfaction and obviously expectations are high.

We were obviously really, really interested in how you might gift wrap online orders, you know, it can be quite complex. It can be quite timely and to do that for physical items might be pretty cost prohibitive if you're, you're a smaller retailer or you're a pure e-com player. There are options in the market.

Country Road very recently launched a service called Wrap4U where you can physically gift wrap items bought online and they use our digital gift wrap service. We know that the consumer really sees value in gift wrapping. I mean, again, for some people it's like fingers and thumbs and sellotape everywhere and oh my God, how do you even do it right?

So when we're, you know, many people are so busy, just get it done for me and I'm happy to pay a couple of bucks to get it delivered. When we think about small retailers and the needs to fulfil this huge customer expectation around gifting, you know, the product, the price, the wrapping, the delivery, it can be pretty much of a, you know, a bit of a brain stretch.

And so that's where the concept of gift flick’s Instant Digital Gift Wrap Service actually kind of came about to solve that problem for retailers, offering their customers the opportunity to create personalised video content that digitally wraps up gifts in seconds and that content can be sent as a URL to reveal the gift through a messaging service of the customer's choice whenever the time is right. 

On that point around delivering the gift, that's also another thing, you know, that the consumers are like, “oh, am I going to get it there in time? How am I going to do it?” Particularly relevant, maybe for people like you, Amie, who do leave their gift shopping to the last minute. That's the extra stress, isn't it? “How am I going to get it to the loved one in time? Will I be, will I be seeing the loved one?” 

And again, with gift flick, they can do that digitally. So I think the things for us are ensuring that the customer has control and peace of mind in the whole kind of process of gift buying to take some of that stress away when, of course, people are pretty stressed when it comes to just juggling their finances at the moment.

The other thing that's been on our mind is with the increasing cost-of-living, there's probably going to be more families and friends that aren't going to be able to justify the expenditure of travelling to see each other this Christmas. Me being one of them, I, I won't be going over to the UK to see my family, can't afford the flights to do that. 

So again, the ability to bring some connection and closeness in that gifting exchange is really, really important. And again, technology like our service is a great way to do that through personalisation and through video messaging to, to connect a message from me to my family and then reveal the item that I've bought for them.

It's, it's far more emotive than just simply emailing a gift voucher that they open alone and go “oh, yeah. Thanks for that 50 bucks to spend it.” Blah. 

Amie:

Yeah, it makes sense. And the thank you, the thank you back. I saw that you guys have launched as well, which is fantastic. Let me dig a little deeper into this emotional complexity, cause as you said, when it's a tough economic climate, there can be those pressures, you know, people aren't necessarily going to be able to travel for Christmas, not necessarily going to be able to see in person, et cetera. The survey sort of honed in on the emotional complexity of gift giving during this time, including feelings of maybe guilt on both sides.

I'm interested to understand how retailers and consumers alike can navigate these emotional challenges. 

Helen:

When you're struggling to make ends meet, right, the need to allocate funds for gifts can really trigger feelings of remorse, inadequacy. Should they really be spending those dollars on gifts when they've got bills to pay?

Children to feed? I'm sure these are questions that are top of mind for many consumers. Certainly resonates with me. So, you know, we believe this internal conflict can kind of dampen the joy of Christmas, essentially, and, and help to enhance the emotional stress that some of us are already feeling when we're juggling our bills.

Our advice to retailers is to be really sensitive to this, right, and acknowledge what The consumer is going through and provide things that, you know, resonate with their state of mind right now. And that's really important when we're thinking about marketing messages, of course. We think for the receiver of the gift, it's a similar kind of sentiment at play actually, and particularly for those close relationships, you know, guilt that the gifter has spent dollars on something when you know that they're in a challenging financial situation. 

So I think there's reassurance from retailers to the consumers around price. It's a good price for what you're getting. It's great value. They're going to be key for both giver and receiver. And of course, you know, the personalisation experience matters too.

We believe that for the consumer, a lower price gift that has been personalised in some way, whether that be the item itself, the way it's been wrapped, the delivery experience, that will have a strong positive impact on the, the giver and the receiver, of course, that will outweigh the reduction in the dollar spent.

So essentially the more thought that's put into the gift, the more customisation, the greater the emotional value between the gifter and the receiver. 

Amie:

And that makes sense, right? I mean, just as a, as a consumer and a gift giver and at times receiving the gifts, you know, someone has gone out of their way to personalise something, it makes a difference because you're like, okay, that's really cool. Was not expected. A little bit unexpected and the kindness that goes into it. It makes sense. 

The survey indicated, and this is probably not a surprise, and we've sort of already touched on it, that online shopping is expected to draw an increasing share of the gift giving spending this year.

I assume that looking for, looking for deals, that type of activity is easier to do online. What are some of the other reasons for this shift and how can, sort of, retailers make the most of this trend? 

Helen:

Convenience is still stated as the number one reason why customers are shopping online again in droves.

And we expect that, of course, this Christmas, I think convenience is made up of a number of factors, though, finding something suitable with ease, because, you know, it's just like when you're traipsing around the shops, actually online, you've typically got a window of time and you just want to get all the gifts and get it done.

So finding what you want with ease, of course, the buying journey itself is simple and easy, minimal steps. Payment options, I think will be a really big factor this year. Confidence in delivery timelines. Again, people may still be worried about what happened last year. And then of course, the added value of personalisation that we've already talked about.

So there's some interesting other factors and some data points that I've been reading, which is the ability to quickly and easily compare those prices. So that you feel like you're getting the right price. I think that's up 8 percent year on year. Seeking out great discounts through discount aggregators is up 10 percent year on year.

The latest stat is 90 percent of shoppers say that they are committed. I love this word, committed to finding a good deal this, this holiday season. So compelling online presence is going to be key to performing well this year, we believe. 

Amie:

So, Gift Flick offers an instant digital gift wrap service, and I've seen the videos, I think it's fabulous, you're now making an online purchase more personal, and as I said before, you can even create a video thank you in return, so it's really not even just the gift giving, but also making that full connection and relationship there. We recently shared an article about your survey online. I'm not sure if you saw this, Helen, I'm assuming you did cause you’re probably tagged in it. 

The comments were just full of praise for the platform. I've never quite seen that before where we've posted something and immediately people just start saying, “use this, this is awesome.” And so many complimentary posts and comments to gift flick and what you guys are doing.

So it's a big congratulation from where I'm sitting. Tell me, where did this start? I mean, I'd love to understand how you came up with the concept and if it kind of was because you were struggling with the whole personalisation on the gift giving side?

Helen:

Essentially was to solve our own problems. So me and two co-founders, one is a classic last minute shopper, busy guy, got a large family and he came to me and said, “do you know what? I've missed my wife's birthday again Helen, I am rubbish. Let's get our heads together and build some technology that means that I could online on my phone, go to David Jones, buy her amazing Chanel perfume that she likes and basically do that when I'm on the train home from work and be able to wrap that up using technology, you know, through video, through sound, obviously through creative motion to create something that looks like I've put five, 10 minutes worth of effort in, when I've actually done it in under a minute.”

That was essentially our brief and it resonated with me. You might be able to hear from my English accent that I have people, my loved ones, who live the other side of the planet. And so I very rarely see them on any of the gifting occasions.

I really wanted to be able to do something the same for them. We just basically solved our own problem and thought, well, do you know what? If it's our problem, it's going to be millions of other people's problems too. like it's not unique. And so we set about building this technology. So that was a number of years ago.

Over the past two and a half years, we've developed our technology. We've expanded our retail client base and retailers seem to love it because it solves their pain points, particularly around shipping deadlines. In essence, if you have gift flick on your ecom platform, you don't really have a shipping deadline anymore because the consumer can digitally reveal a physical item instantly, you know?

So it's hard, they can miss Christmas of course, because they can shop on the 26th of December, but they can shop on the morning of Christmas. And we definitely saw that around Mother's Day this year with a couple of our new clients in Endota Spa, for example, customers were buying online on the morning of Mother's Day and then digitally wrapping it up with our technology and sending it straight over to their moms as a URL, consumer use is up 357 percent year on year.

Amie:

You're at the point where you've solved your own problem there. Well done. What has consumer uptake look like? 

Helen:

Yeah, it's been interesting. Maybe I'll just talk about some of the other gifting occasions outside of Christmas, actually, because this is some really interesting consumer insights. Looking at the survey data we've done recently and then two years of transaction data gives us some good insights around what consumers are thinking and doing.

So, first off with the survey data, 10 percent said they will be cutting back on spending on gifts overall. When we dive into what are some of those occasions, some interesting numbers here. Our survey respondents are saying that they will be spending an average of 73 dollars on family member’s birthdays. They'll be spending 63 dollars on the birth of a child, 95 for wedding gifts, 50 bucks for a friend's birthday. And then 73 dollars for family members at Christmas this year. 

And poor old pets are really worse off there. The average spend is 34 dollars and I think that's like a 50 percent reduction year on year. It is clear from the survey data that the type of gift occasion really matters to the consumer this year. Birthday gifts for family members have changed the least year on year.

Again, I guess we see that as potentially that's the depth of connection you have with your family, right? So that's interesting. Although, there's a 48 percent reduction in the amount you'll spend on the birth of a child, which again is interesting, and then a 51 percent cut back on wedding gifts. So, I guess the word of advice here is don't get married over the next 12 months because you won't get your money back. 

Looking at some of our data that we've collected then, which is consumer behaviour using gift flick over the past two years, some really interesting things. So, 77 percent of our gift flick transactions are for evergreen gifting occasions, and we define those as birthdays, anniversaries, and...And saying, thank you, get well, for example. 

So it's not those big seasonal moments, actually, that you would initially think is the use case for our tech, but of course, birthdays and anniversaries, they're all year round, they really add up. So gift flick is really a value-added service the whole year round, not just for Christmas.

And then looking at what the consumer has been doing with our tech, just to reference Country Road, who've been using our tech for two years now, they give their customers the choice to use gift flick to instantly digital gift wrap, either gift cards or physical products. Their customers have been opting enormously for physical products when they're shopping with us.

In fact, 78 percent of Country Road customers are wrapping up physical products. We're excited about that because we think that it shows that given the opportunity over a gift card or a physical product, the customer wants to actually buy something. Something that is perceived as more thoughtful. Amie loves beautiful little handbags, so I'm going to be able to get her that even if I'm a last minute shopper versus a gift card for a nominal amount. 

It's useful. It's practical, but it can be a little bit hollow when it comes to that emotional connection. And then the other really interesting thing, this is data across our whole portfolio, is where our gift flick customers have the opportunity to buy a physical product or a gift voucher, when they're spending on physical products, the average order value is up 20 percent versus a gift card. 

So, retailers are quite excited. It means that they are able to choose a physical product and they're spending more in their basket than they would if they just bought the gift card. So some really interesting data points that hopefully will be useful for anyone that's listening and thinking about, does personalisation really matter? Do I really need to bother with this whole gift wrapping? I think the answer to that is yes, there's a commercial upside. 

Amie:

There definitely is by the sounds of it and in terms of, I know you've released some exciting features. You've got the thank you response, which I saw and I was so pleased about.

What's on the horizon for you guys in terms of the next couple of years? 

Helen:

Growth in this market, New Zealand market, of course, and growth in the UK market is really important for us. There's some interesting additional use cases for gift flick. It was born from solving a consumer problem that we talked about, but obviously for the retailer, it's an acquisition tool, right?

Closing out that last minute sale. But as we've kind of learned about the consumer and had great conversations with lots of retailers, we have found some interesting use cases. The first one is the ability to use gift flick to deliver loyalty reward programs. So last year, Country Road used our technology to deliver a credit to their platinum loyalty customers, featuring a personalised message from their managing director, thanking them for their support.

Corporate gifting is a big area for us this Christmas. So this is new for us, you get with this, you know, distributed workforce working all over the world or wherever else and not always in the office. How do you actually deliver that gift? You know, one to one with a message that resonates with that individual employee.

So that's gonna be big for us this Christmas. We introduced it for Mother's Day, actually. And it was really born around the good manners that your parents try and instil in you. Always write your thank you messages. No one's really got time for that. So this is really simple where you receive a gift flick and then you can quickly just click on a button and you can record your own to say thanks.

The modern day way of saying thanks very much. I love that sweater. Please make sure you keep sending me lovely gifts. There's lots to come in terms of use cases for gift flick across various different channels. And of course, trying to expand our reach far and wide for any retailer that feels like these pain points are common to them.

Amie:

A big thanks to Helen Marsh from gift flick. The report on gift giving titled ‘Who Wants What?’ is available now. And I'll put a link to the report in the show notes. If you enjoyed today's episode, make sure you subscribe using your favourite podcast app, and don't forget to rate and review the podcast.

Outro:

Looking to stay ahead of the curve in the retail industry? Inside Retail's got you covered. With in depth coverage of the latest news and insights, Inside Retail is the go to source for retail professionals. Stay informed and connected. Read Inside Retail today.