In a time when people have struggled to keep in touch, businesses of all sizes have had to find unique ways to connect with customers and employees. Since video calls can only get you so far, more and more companies are turning to gifting as a creative means to show appreciation, generate new business, and increase brand awareness.
Recent studies in both the United Kingdom and the United States have revealed a boom in the corporate gifting market over the past year. Companies that have embraced this strategy have revealed substantial increases in customer retention, employee motivation, and new business.
What’s more, the skyrocketing corporate gifting market shows no signs of slowing down any time soon and is expanding way beyond the marketing department.
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What Is Corporate Gifting?
Corporate gifting is the practice by which businesses give presents to clients, partners and employees in order to motivate certain behaviours and increase brand awareness.
Gifts can take many forms, including event tickets, courses, corporate clothing and merchandise, monetary rewards, meals and beverages, and personalised items. These gifts range in cost from token amounts to big-budget items and once-in-a-lifetime experiences.
While corporate gifting has long been a popular business practice around the world, the Covid-19 pandemic has seen unprecedented growth in this industry.
UK Corporate Gifting Worth £78.3 Million
To put this growth into context, a recent study by rewards and incentives specialists, One4all Rewards, has revealed that the UK corporate gifting market is now worth an estimated £78.3 million. Here are some of the stats uncovered by the study:
- Almost half (49.3%) of UK workers had received rewards or incentives from suppliers.
Similarly, almost 50% of workers had received incentives to connect with existing or prospective suppliers. - The average value of worker incentives and rewards was £50.
- Staff incentives were much more common in the private than in the public sector. The manufacturing industry led the pack with 68%, followed by the utilities (67%) and information and communications (62%) sectors.
- The most popular (35%) types of corporate gifts were food and beverages. This preceded gift cards (29%), and monetary rewards like commissions and bonuses (21%).
- A considerable number of businesses opted to gift employees, clients and partners with unforgettable experiences like days out and tickets to special events (20%). Another 16% combined gifting with face-to-face engagements like staff parties.
- Workers within the education industry (33%) report having received these types of rewards the least, closely followed by those in local and national Government (37%) and healthcare (38%
US Corporate Gifts Outstrip Personal Gifts
A similar recent survey by New York-based research and advisory firm, Coresight Research Inc. indicated that these corporate gifting trends are not exclusive to the UK. The Coresight report, which looked at 300 corporate gift buyers from US companies with revenues of up to US$30 billion, revealed a post-pandemic boom in the country’s corporate gifting market.
The study revealed that the actual size of the corporate gifting market is far greater than previous estimates suggested. In fact, corporate purchasing holds a far bigger share of the gifting market than does spending on personal gifts. The report shared a number of valuable statistics and insights regarding this industry in 2020 and beyond:
- The total value of the US corporate gifting market is expected to reach US$242 billion before the year is out.
- 60% of corporate gift spend went to items for clients and outside partners, whilst the remaining 40% went to internal stakeholders and employees.
- More than half of the companies surveyed had increased their gifting budgets as a result of changes brought by the Covid-19 pandemic.
- A surprisingly large average amount of between US$25 and US$125 was spent on each corporate gift, with most companies spending somewhere between US$75 and US$100 per gift.
- The most frequent gifting occasions (64%) among these companies were shows of appreciation for and recognition of employees.
- Roughly 50% of companies indicated that they similarly showed appreciation for clients and partners via gift giving.
Why Corporate Gifting Matters
According to UK-based online business advisor, Talk Business, corporate gifting generates roughly 88% recall, meaning that a well-timed and carefully selected gift in the right hands can help ensure repeat business. This explains why, as the One4All Rewards survey revealed, 95% of British bosses see corporate gifting as a crucial part of business strategy.
Toward the end of 2019, International gift and direct mail sending platform, Sendoso published an article on its website discussing why corporate gifting is important. According to Sendoso, receiving a gift is a powerful emotional experience and generates a sense of connection. This can foster a positive association with the sender in the mind of the recipient.
The Sendoso article paid particular attention to the endowment effect. This refers to how the recipient of a physical gift values it more highly because of a sense of ownership over the gifted item. This then translates into a proportionate increase in the recipient’s value of the giver.
In the corporate world, the endowment effect enables businesses to engender greater feelings of trust and reciprocity in clients, partners and personnel via carefully selected gifts. Sendoso added that consumers who are emotionally connected to a brand have a 306% higher lifetime value.
Indeed, as online software developer, Instapage reports, 80% of consumers indicate a greater inclination to do business with a company that offers incentives in the form of personalised experiences.
Meanwhile, respondents in the aforementioned Coresight survey reported similarly positive results from corporate gifting:
- 80% of respondents said that gifting had improved employee and/or client relationships.
- 48% said gifting yielded substantial benefits.
- The primary benefit reported was that the recipient felt substantially more valued (45%).
- Respondents also said that gifting had substantially contributed to increased customer loyalty (43%) and employee retention (41%).
Moreover, another survey by the aforementioned One4All found that gifting and incentives had a profound emotional impact on employees, in particular.
This multiple-industry study (published in the Workers on Top of their Game Report) surveyed 1 096 UK workers of various genders and ages and looked specifically at the benefits of workplace gamification. (Gamification is a practice by which employees are repeatedly offered small rewards to motivate actions beneficial to the organisation within a game-like structure.) The survey yielded undeniably positive findings in favour of this practice:
- Nearly half (46%) of respondents indicated that gamified rewards would make them feel more motivated.
- 20% said that such points-based rewards and bonuses would inspire them to increase their performance.
- 32% said they would work harder at their jobs to access such rewards and bonuses.
- 37% added that gamification would increase their happiness.
- 36% felt that such shows of recognition would heighten their experience of company engagement.
- 38% indicated that having rewards to work for would make their jobs more fun.
Amazingly, the report revealed that 52% of companies are not yet using gamification to motivate employee performance and engagement.
Corporate Gifting Beyond 2021
Those servicing the corporate gifting sector will continue to rake it in over the coming months and beyond. The total value of the US corporate gifting market is expected to reach US$242 billion before the year is out and will continue to grow at an accelerated 8.1% compound annual growth rate (CAGR) between then and 2024. This is compared to a projected 6% CAGR for personal gifting.
In general, the companies consulted in the US-focussed Coresight study stated that pandemic circumstances will have a long-term impact on their corporate gifting strategy. 70% of companies expect to either maintain or increase the frequency of corporate gifting going forward. Among these organisations, the overall trend for future gifting strategies will be to focus on particular events and milestones, rather than on holidays, which were a greater focus in the past.
These sentiments are echoed by the already referenced Sendoso article, which stated that corporate gifting will continue to evolve and increase. The firm anticipates that direct mail marketing and corporate gifting will deliver as much as 10 times return on investment, particularly in the business-to-business sector.
Sendoso pollsters revealed that employee and gifting programmes will increasingly be consolidated to cement brand recognition. Experts also expect that departments other than marketing (such as HR and customer care) will increasingly become involved in gifting strategies.
All of this growth is set to be driven by ever-evolving digital technologies enabling enhanced personalisation and automation. Future corporate gifting strategies are also expected to be strongly influenced by inclusivity and sustainability concerns.