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Converting Gift Shoppers into Buyers for Your Online Store

By Special Guest
Roy Erez, co-founder and CEO of Loop Commerce
September 28, 2015

When it comes to gift giving, online shoppers can be gun-shy for various reasons. Customers will routinely buy products online for themselves at their favorite stores, but for gift buying will often look elsewhere.

Since overall, 15 to 20 percent of all online shopping is for gifts, retailers can capture more online gift sales if they improve the shopping experience to overcome obstacles gift givers face when buying for others.  

These improvements address both the emotional drivers and the transactional needs of gift shoppers. Most retailers fail to recognize that the path to conversion and the friction points for shoppers buying for others is very different from the path of buying for themselves. The main challenges to meeting the needs of online gift buyers include:

  • Making sure that existing customers, and prospects, view your online store as a gift destination and not just a place to purchase products for themselves.  
  • Making it easy and intuitive to purchase a gift despite the large number of product selections and options buyers would need to choose from.
  • Realizing that your regular exchange and return policies may not be adequate to capture gift purchases.
  • Recognizing that a long lead-time for processing and delivering the gift can be problematic, as many of these purchases are done at the very last moment. Also, deterring many gift purchases by prominently highlighting early cut-off dates for shipping and delivery – a clear message to shoppers to go elsewhere to buy.
  • Making sure to focus not only on the typical transactional elements, but also on the emotional and social elements that are associated with these gift sales.

Rather than having these customers gift-shop elsewhere due to the challenges described above, retailers who are reaping the most benefit from online gift buying have made their sites easier and more intuitive for gift buying.

One of the biggest fears gift buyers have is buying the wrong gift, which puts the burden on the recipient to return or exchange it.  This fear increases when they shop online. In a recent Loop survey of more than 1,000 online shoppers, conducted in August 2015, more than 25 percent said they hesitated to purchase a gift online due to this concern.

There are things retailers can do about this. Make sure the online store includes a gift section or gift guide that highlights the most popular gifts to give purchasers confidence they are buying items in demand. Also, make it easy for the recipient to exchange the gift by offering a “return anywhere” policy agnostic to the channel in which the gift was bought. Once you’ve got the procedure and policy in place, promote your hassle-free exchange and return policy to those who would be buying gifts.

As for the anxiety of too many options within your online store, create gift sections organized by categories, price points, and occasions to simplify the selection process. And don’t forget the power of visuals. A 2015 study of over 1000 consumers by Animoto Online and Social Video Marketing found that 80 percent of Millennials found videos helpful during initial research for a purchase decision. Make it easy for customers to get a better feel for the product by including photos, videos and customer reviews.

This might seem minor, but online buyers also are worried that the gift will arrive with a receipt that shows the price paid – a big faux pas. To make the gift purchasing process less transactional, address this concern by creating a special gift receipt for receivers that does not show the price. Also try to offer a personalized message from the buyer to the recipient.

You’ll also reduce a lot of friction in the transaction by modifying or eliminating shipping and delivery deadlines; do this by offering 2-day, 1-day or even same-day delivery, to support “last minute” purchases, defined as gifts purchased the day before or day of the holiday. Overall, our retailers have seen close to 40 percent of e-gift purchases through the Loop checkout as last minute purchases. For example, this year on Mother’s Day, 43% of all e-gifts purchased were “last minute gifts.” Last year, we saw 23 percent of Christmas e-gifts purchased last minute. About 38% were purchased the week after Christmas and 10 percent were purchased during the first week in January.

There is a significant opportunity to capture sales from the approximately 20 percent of people psychologists call “chronic procrastinators” or from those who were not planning to buy a gift but who might surprise someone by giving them a gift. Consider offering a personalized e-card that can be sent immediately with a note stating the physical gift is on its way and the sender has not forgotten this special person.

The majority of gift purchases no longer occur during the last quarter of the year. Birthdays throughout the year are the top gift-giving occasion. Merchandise your store in a way to capture more of those year-round gifts by highlighting products that make great gifts year-round. An always-on gifting philosophy will also enable you to capture more of the impulsive gift purchase behavior of Millennials – 60 percent of them purchase “just because” gifts.

If retailers integrate these gifting strategies into their overall approach, customers can overcome the psychological and transactional obstacles to shopping for gifts online.  As a result, retailers will not only convert more shoppers to gift buyers but will also provide an improved customer experience that reflects positively on their brand.  

Roy Erez is the co-founder and CEO of Loop Commerce, a company driving a paradigm shift in gifting and e-commerce. With a lifelong passion for innovation and entrepreneurship, Roy has more than 15 years of experience spanning technologies, industries and verticals. An entrepreneur and former venture capitalist, Roy served as a senior executive at several technology companies, successfully building and growing them before founding Loop Commerce in 2012.  He holds an MBA with high distinction from Columbia Business School and is based in Silicon Valley.

As co-founder and CEO, Roy oversees the day-to-day operations and company strategy, leading Loop’s efforts to power gifting for retailers and industry partners, and to redefine the way consumers purchase and send gifts, as well as the way recipients experience receiving them. Investors include PayPal and several other influential technology and retail industry leaders. Forbes recently named Loop Commerce as one of 12 companies “moving global commerce forward.”

Roy will be speaking at the Digital Summit on the 10+ Things You Can Do TO Make More Money Next Week- Holiday 2015 Edition.

Edited by Stefania Viscusi

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