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Boost Sales with the Science of Gifting

Posted on 11.14.2013

:: By Monika Kochhar, Smartgift ::


Retailers make more than 25 percent of their yearly sales and up to 60 percent of their annual profits between the Thanksgiving and Christmas holidays. Yet, this is a fraction of what they could be making if they better understood the complex psychology and economics of gift-giving and offered more intelligent gifting mechanisms in their online stores. Here are three e-commerce tips based on the science of gifting to boost your online sales during the winter holidays and beyond.

Offer Personalization

According to a 2010 psychology of gifting survey by Kelton Reseach for eBay, 80 percent of married women do most of the household holiday shopping, and 42 percent of women consider themselves to be emotional givers. They focus on planning, personalizing and finding unique, thoughtful gifts for everyone on their list. Between 71–77 percent of all women despite their shopping tendencies, put meaning into their gifting process. They think it is important to personalize the gifting experience. 

You can boost gift sales by offering creative ways for customers to find the right gift and personalize the presentation of their gifts (both online and off). This can include dedicated gift tabs on your site, customizable greeting cards, real and virtual gift-wrap, and the ability to record and send voice and video messages to gift recipients.

Leverage Social Proof and Scarcity

When people are uncertain about a course of action, they tend to look to their peers for recommendations. This often includes deciding on the best gifts to give. Finding the right gift can be challenging and even stressful due to our need for social approval. Additionally, economic theory dictates that rare and unavailable items drive higher demand. People act quickly when there’s a potential to miss out on something because we’re more sensitive to potential loss than gain.

To capitalize on social proof and scarcity, make sure to have dedicated gift tabs in your online stores to easily guide gift givers and include ratings, reviews and testimonials from gift recipients. Build a mechanism into your site that allows recipients to add their demographic info to make your gift tabs more intelligent and help you identify popular holiday items. Create scarcity by offering limited time only and exclusive holiday edition products and sales.

Give Recipients Choice

As part of a joint social experiment by the University of Chicago and National University of Singapore in 2012, participants were randomly selected and divided into gift givers and recipients. Recipients were asked to recall a liked or disliked gift and report how much they appreciated the gift. Givers reported how much gratitude they believed the recipient of a gift they had given felt. Conclusions showed that the right gift must communicate the investment of time and show the gift giver has put herself in the recipient’s shoes.

To make things easier for gift givers, integrate wish lists and registries into your site. Provide mechanisms that allow recipients to choose exactly what they want. Let gift givers choose specific products to show investment of time but ultimately let the recipients choose their preferences.  In the process, upsell recipients and let them exchange gifts for anything else in your online store by adding extra money from their own pocket to ensure they get exactly what the want in the end before the gift ships.


Monika Kochhar is the co-founder and CEO of Smartgift. She founded Smartgift in 2012 to drive online gifting for retailers through the application of science, monetizing on the psychology of the gifting behavior. She has a background in Economics and Computer Science from Mount Holyoke and the London School of Economics, where part of her academic research focused on the anthropology and the behavioral economics of transactional exchange.

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