During the pandemic, corporations realized that one way to reward and connect employees, dispersed to home offices and laptops, was to give them gifts and awards. Virtual events came to a similar conclusion. The way to make attendees feel valued and appreciated was to send them an event-themed gift box — a tangible way to make them feel part of something larger.
A study conducted by Coresight Research and sponsored by GiftNow estimated that the corporate gifting market would reach $242 billion in 2021 (when the study was conducted) and forecasted it would have a compound annual growth rate (CAGR) of 8.1% through 2024. There was a 60/40 split in the spending, with 60% going to corporate gifting and 40% spent on employee awards and recognition.
The lesson of the pandemic seemed to be that corporate gifting needed to be more than a tub of popcorn or a wine basket at Christmas. If a corporation wanted to stay connected to and remembered by clients, they needed to think outside the box when selecting corporate gifts, and to send those gifts during more occasions than the holidays.
In some cases, useful gifts became more the norm. As Lisa Lemonick of New Jersey-based Scrappy Dappy Doo says, “Most of our corporate companies want something usable and less gifty. Hats seem to be the go-to gift, then nicer shirts and jackets following.”
Gifts that have a utility and that clients or employees can use over and over have a higher return on investment than something that simply sits on a desk or is eaten in one evening.
When it came to rewarding employees, many of whom were now working from home, companies needed to do more than put a small faux brass nameplate on a plaque. Employees needed to be made aware that they were appreciated and valued, so the gifts needed to create an emotional connection. Whether the gift was for a corporate client or a corporate employee, it needed, and still needs to be, about relationship building.
Since giving gifts and recognition to both corporate clients and corporate staff has increased in importance since the pandemic, where does that leave the creators of corporate gifts and those vying for a piece of the market? A few things stand out from the 2021 study:
- Gift cards are still the No.1 gift-giving choice — In the study, physical (51%) and digital (48%) gift cards were the two most purchased items over 12 months. This makes sense. A gift card is a gift that is somewhat specific but generic enough that the receiver can’t find something they like and want.
- Events can be fertile ground for corporate gifting — While in-person events have returned, many events have stayed digital or gone to a hybrid format. One lesson learned from the pandemic was that gift boxes are a great way to show appreciation and increase attendee engagement.
- Companies are willing to spend more per gift given — The study showed that companies were spending between $75 and $100 per gift. The desire seems to be for higher quality and more memorable gifts.
So, what does this all mean for companies that want a piece of the corporate gift giving or employee gifting and rewards business? There are a couple of takeaways. The first one: be creative. Corporate gift buyers, whether they’re buying for a huge corporation or a small one, are looking for companies that think outside the box to supply their gifts.
Let’s take gift cards for instance. The study showed many corporate gifters are looking to go that route, but a lot of decoration shops may wonder how gift cards fit into their marketing scheme. When it comes to corporate gift giving, there may be options. Perhaps this means making up three or four different gift packages at the same price point and offering cards so employees can choose which basket they want, or you could offer garments with the company logo and a gift card for additional personalization, such as a monogram.
A second takeaway is the rise of virtual and hybrid events. This can be fertile ground for decoration shops and something many of them may have ignored or not thought of in the past. This trend will continue and, as attendees get more and more used to getting gift boxes or bags from events they attend, more and more events will have to jump on this bandwagon. Keep in mind that an event doesn’t have to be huge for the showrunners to want to have something to give to attendees. There may be local conferences or events in your area who are looking for gifting options.
The fact that corporate gift buyers are also willing to spend more per gift is a positive sign. For those interested in entering this market, it might be a good idea to have gifting ideas at several price points. When you pitch, start with your highest price point and work downwards. While it is unlikely that the days of tacky, cheap corporate or event gifts are entirely over, companies and events are waking up to the idea that sometimes more is more, and that gifts that make a statement or impression are better values in the long run. As this becomes more apparent, more companies are going to be willing to pay the price for higher quality and higher impact gifts.
Another fertile area is employee rewards and awards, and here the price point and quality markers have gone up. It’s not enough anymore to put a faux brass plate on a plaque that simply gathers dust in a hallway. Given the current labor market, employees now have more options than ever, and they want to feel that they’re valued and appreciated where they are.
Companies that want to preserve their workforce are serving that need with high-end corporate gifts and more meaningful awards and rewards. Whether it’s an onboarding gift box or an employee of the month award, companies know the bar has never been higher.
The question for shops that want a piece of this market is how to capture that piece. The place to start is most likely with what the shop currently offers or could offer:
- What products can you easily make?
- What things can be combined to create a gift box that is both unique and high quality?
- Is there a particular business niche or gift niche that you can best serve?
Look for the low-hanging fruit first. What can you easily do or create without a lot of rejiggering of your shop processes or products? Next, look at venues where you can sell the gifting options you’ve created. Are there businesses in your area that could use what you have to offer? Do you want to devote part of your website to online sales of corporate gifts?
Are you willing to work with clients to create unique and one-of-a-kind gifting options, or would you rather create pre-set packages and only sell those? Some corporate gift buyers may like the ease of having
preset packages from which they can choose, so most of the choice and stress of choosing is removed. Others might want to build their own exclusive packages from the ground up. The preset packages may have a lower price point, but they will also require less work to create. The bespoke options will, most likely, require more work on the part of the shop, but they’ll also probably sell at a higher price point.
Make sure that you share the gift options you create on your social media feeds. You never know when one company will see something you’ve done for another and reach out. It’s also a good idea to make sure you keep in contact with all the gift buyers from the companies you serve.
Lemonick says the first way her company finds corporate gift buyers is through posting on social media and getting calls from people who’ve seen their posts. “The second way,” she says, “is usually from previous customers who have switched jobs, so we assist them in their old job and then we move to their new job with them.”
Given her experience, it is evident that it pays to keep your contact list current and to stay in touch with the news about current buyers.
Corporate gift buying, whether for clients or employees, is an ever-growing market and, as with many things, the pandemic changed the focus and the needs of the market in a variety of ways. If your shop is looking to capture a piece of this market, focus on unique gifts that have long-lasting utility.
Provide gift options at a variety of price points and decide whether you’re going to offer only sets you’ve already created, bespoke packages, or a combination of the two. Make sure to create a contact list of gift buyers and keep it current, tracking job changes when they happen. This market is vibrant and ever-growing, so your efforts should result in a significant return on your investment.