journalist, tech entrepreneur
Recently, online gifting has become a hot topic in many media. Journalists and bloggers are discussing the new potential market, its volume, and emerging trends. I decided to tap into the subject as well and study some numbers, global problems to be solved there, and what technologies can do it. Let's go!
People love to share their love and emotions through gifts. And as our lives are shifting online, so do our other habits. Gift-giving is a fundamental part of human relationships, and new tech is changing how it occurs.
In 2018, René Kizilcec, Cornell assistant professor of information science, published a study, "Social Influence and Reciprocity in Online Gift Giving," co-authored with Dean Eckles of the Massachusetts Institute of Technology, and Eytan Bakshy and Moira Burke of Facebook. In this paper, scientists examined how social networks influenced the way we send and receive gifts.
It turned out that social networking sites create greater awareness for gift-worthy occasions like birthdays, and gifts can be given last minute and over long distances. Another critical factor revealed: online tools inspire people to give more and give back.
For example, the researchers found that when the person got a gift on social media for their birthday, there was a 56% higher probability that he or she will also send an online gift. So, around the third of all, online gifts were inspired by receiving a gift. Millennials were easily influenced to give online gifts after receiving one.
Also, online gift-giving is often inspired by an example of friends and relatives. Those users who saw their friends exchange gifts were more likely to consider online giving 'normal' than those who learned about online gifts through other means, said Kizilcec in an interview.
So, as we now understand how online gift-giving works, let's see if there is a market for it.
Over the last years, the online gift-giving market witnessed steady growth worldwide. It was due to a rise in social networks and penetration of the internet (including mobile). The online gifting market has two segments - Corporate and personal.
According to stats, the global personalized online gifts market amounts to $31.36 billion and will grow at a CAGR of more than 9% during the next couple of years. Also, another report estimates the global non-cash business gifts are expected to reach $125 billion.
However, despite the high numbers of the gift-giving market, we need to understand whether there is a specific online gift-giving segment or it is too small? Let's see what problems tech can solve here.
There are three major gifts-related problems out there. The first one can be formulated as "I don't know what present to choose." The second one is connected to receiving gifts ("How do I stop getting useless stuff as a gift?"), and third sounds like "How do I send a gift to another city fast?"
There are gift recommendation websites, but they work poorly and usually serve as a showcase for items from the specific e-commerce websites. People could filter what they get as a gift using wish lists, but though this tool is popular in the US, it is not in many other countries. Gifts delivery from person to person is still a huge pain.
On the corporate level, there are issues as well. Companies send a lot of gifts – to partners, counterparties, customers, etc. This process is opaque, include middlemen; businesses always had little control over gifts delivery.
Modern technology solves these issues in many ways. First, there are pure digital goods out there. Social apps like TikTok allow people to easily send and receive digital gifts to convey their emotions. It is super rewarding and straightforward.
Also, there are applications like Gmoji, that allow sending real-world gifts via any messenger or specialized application. It works as follows: the person who wants to send a gift, browse a marketplace with offline service providers like coffeshops. Then, he or she picks the good to send (eg. a cup of coffee), the system generates its emoji-like code (so, 'gmoji' is gift + emoji'') with the link. The recipient can then go to that specific coffee shop and get the free treat.
Thus, the delivery problem is completely eliminated, as the recipient gets a digital representation of an original item, which can be received later offline.
For businesses, such technology allows better control over customization like branding and delivery time. It is easy to customize emoji, and you can schedule them to be sent, say, at 23:59 on the New Year's Eve. Also, the business gets all the gift-related data: when the gift was claimed, where, was it passed to someone else, etc.
Online gifting is an emerging market with its own trends and problems that can be solved by technologies. This means that we will see more and more exciting tools and ways of sending gifts.
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