THE PSYCHOLOGY OF GIFTING (and how understanding it can help you bring your customers closer and build brand value)
It’s late November and very shortly the biggest gifting season of the year will be upon us. And by ‘us’ I mean all of us. You may not celebrate Christmas in the traditional Catholic sense, but it is increasingly clear to everybody that, whatever your tradition, Christmas is becoming a festive period where gifting as well as general celebration is the norm. In the UK and Ireland, we may not have hit the American ‘happy holidays’ phase yet but there’s no doubt that we are closer to it than we were ten years ago.
At this time of year, businesses often buy their clients gifts. Friends buy each other gifts. Employers buy their teams gifts and many men run aimlessly around shopping centres on December 24th trying to avoid the magnetic pull of the jewellers (just me?)
Gifts have been given for centuries – here are some notable examples:
- In 605bc, King Nebuchadnezzar built the Hanging gardens of Babylon as a gift to his wife.
- In 1885, France gifted the Statue of Liberty to the USA
- In 1947 President Harry Truman gifted his wife a two-lane bowling alley!
- In 1983 Santa gifted me Star Wars characters and Starships (you never forget).
As marketing people, we must ask ourselves why do people spend money on gifts and how can we understand this behaviour better? There are lots of reasons other than just the feel-good factor. In ancient times people offered up gifts to the Gods so they might offer them a generous harvest but as interesting as that is it’s less likely to be in your 2025 marketing plan so let’s look at the ones that affect us today.
Status
The Native American Tribes had a tradition known as Potlatch. The leader of the tribe would distribute gifts to members of his tribe based on their seniority. The Alaskan Iñupiat used to go on large whaling expeditions and on their return, they would share out their catch based on the seniority of their own tribes. So, it’s not just now that those who already have a lot seem to get more – it goes way back. Of course, this is a two-way interaction. The gifter is saying to the recipient I know your status and I value that – “here’s some nice blubber.” The recipient is acknowledged, and no doubt gets a little ego boost from that acknowledgement.
Can anyone think of a campaign that ran for years in the UK and Ireland that was based on this concept? I’m not sure why it was stopped rather than adapted but the campaign I am referring to is Cadbury’s Roses. For 20+ years Cadburys convinced us that the best way to say ‘thank you’ was to give someone a box of Roses. It was a perfect campaign in my humble opinion. Full of emotion but intrinsically linked to a practical action that leads to more sales, all while both the gifter and the recipient are smiling at each other. The brand helps to make this happen. From a status point of view, the gifter is saying I value you as someone who has helped me in some way and the recipient is happy to accept as the gift is small but considerate. Cadburys obviously agreed with me as after a twenty-year hiatus they decided to bring the campaign back. Check out this sweet (pun wasn’t intended but I can see it now) ad here. I’m not sure if it had the cut-through that earlier ads had as I don’t remember seeing it but I am certain that for a whole generation of 40-70 year olds (the people most likely doing the big shops this Christmas), this campaign still has so much resonance that it could be rolled out again tomorrow. “Here’s some Cadbury’s Roses to confer your status as a helpful friend” – I’ll leave the tagline to the copy writers.
So what?
How do you as a brand owner tell your customers that you value them via your products and offers? Could we argue that Tesco via its Clubcard specials does this? Probably. Or Costa gifting you a coffee on your birthday? Yes. They are not just your customers they are the heartbeat of why you have a business. Lean into their special status and gift them a thank you.
Before we look at other reasons to gift let’s look at some Christmas stats for the UK. According to a survey conducted by Spark – LifeStars’ big sister, in November 2024, 44% of UK shoppers are planning to cut back on their Christmas spend versus last year. The cost of giving crisis is upon us. Even more ominous is the fact that 56% of UK shoppers believe that the pressure of buying gifts takes the joy out of Christmas. With that in mind, are we facing a change in Christmas traditions? Is it just a temporary blip as people find their feet? The upcoming Black Friday will be a proper indicator. UK shoppers are expected to spend approx. £9 billion over the course of Black Friday weekend. Perhaps it is a case of smart shopping as opposed to no shopping at all. I know if I were selling FMCG in this economic climate, I would be keeping my customers close in order to understand their intentions and how I can add value to encourage them to part with their hard-earned funds.
Look at me! Impact on self-concept.
I have quoted the groundbreaking work of Russel Belk before. Check it out here – this paper is 36 years old but as true today as it was then. Russell (I met him once so I will eschew the formalities), believes that consumers attach meaning to possessions and that we manage our “fragile sense of self” by how we manage our possessions. That’s basically it anyway. So, it’s no wonder that this has a large bearing on gifting.
By giving gifts that we perceive to be ‘better’, we can enhance our own personal image and help to create a positive perception of ourselves for others. We have all been there. Will I buy the gift for £20 or the one for £30 that has so many more bells and whistles? Let’s buy the £30 one – sure they’re worth it (is what we tell ourselves but what we really mean is I am worth it – look at me, such a good person. If I am the recipient of the more expensive gift, I’d be delighted. Who doesn’t love some bells and whistles? It is highly likely that this transaction unfolds without anyone being any the wiser regarding the massaging of self-concepts, but that doesn’t negate that this is happening.
How can retailers use this need for self-concept aggrandisement to their own ends? One way I have seen both online and offline is ‘today’s star offer’. If you log on to Amazon now, you will see Black Friday top offers. This is a chance for a gifter to buy a gift for a significant reduction but for one day only (nothing like the scarcity effect to push people over the line). Now do I really want a GHD straightener for £106 when I could buy a nice Remington one for £40? Well, for those who don’t know me, let me assure you that I will never have a need for either but as a gift, maybe? And will the recipient feel that I value them more if I buy the big brand? Probably. Will I feel like the Dad (yes, my daughter would love this) who has done good? Definitely. Status? Check. Self-concept hug? Check.
This scenario plays out in grocery stores too, which can be seen as daily manager’s specials, (although this is less popular now due to Central Warehousing), or weekly specials. These are a way for stores to drive the self-concept effect and they work particularly well around Christmas time.
So what?
If I was Asda, Tesco, Morrisons, Waitrose, Aldi, Dunnes, Supervalu or Lidl (we are an equal opportunities agency at LifeStars), I would like to know exactly which categories will benefit most from this phenomenon and then I would drop the products carefully between now and Christmas and watch consumers feel good about themselves (and my brand because we facilitated it). Bring customers closer.
Speaking of Black Friday, online sales will dominate this Christmas. Every age group, even 65+ will shop more online this year than in-store. (Statista) 62% of those aged 25-64, dropping to 47% of those who are older (with 11% neither or don’t know in this category). It’s no surprise that online is essential for any modern retailer so it is important that these retailers take time to fine tune their websites pre the Christmas rush. If your site needs some optimisation, then contact the team at Audience Collective and they will be happy to help (just click the logo). Is it quick enough? Is your SEO purring? Can you track all transactions and buyer journeys? Have you the right pricing strategies in place? What about the product range? Talk to your customers and your competitors’ customers (www.lifestars.com) to find out what needs tweaking then let the tweaking commence. It may be too late for this year, but Black Friday and Christmas has a habit of coming around every year. Gift yourself a website upgrade – you’re worth it.
Altruism
The next reason people give gifts is Altruism. Consumers are fundamentally emotional beings navigating their way through an increasingly complex marketplace to find meaning in the products they buy. Clearly the category that benefits most from this type of gifting is the Charity sector. In 2023, 82% of Irish adults said they donated to charity at Christmas time (charitiesregulator). In the UK, this figure was 80% just for Gen Zs (Civil society).
People like to feel better about themselves by gifting. This can be by giving to a friend but at times like Christmas, it is often the folded note placed in the hand of someone sitting on the street. Or perhaps a prompt from a TV show like Children in Need. It is no coincidence that the Children in Need show takes place mid-November every year. Since it launched in 1980 it has raised more than £1Billion for disadvantaged children and young people in the UK. Ireland has its own cultural phenomenon that is The Toy show. It airs on the first week of December and on the side, it raises about €5m each year. People want to gift to people less fortunate than themselves, especially at a time like Christmas.
So what?
Brand owners can leverage this desire and do good at the same time. In Ireland, Ballygowan water supported the Marie Keating (cancer) foundation for many years. Toms shoes donate one pair of shoes to a disadvantaged consumer for every 1 bought. Ben and Jerrys donates 7.5% of its annual profits to fighting for social justice. YouGov did a 17-market study that shows that 45% of people are more likely to buy a product if some of the proceeds are going to charity. Only 5% are less likely. It works. The trick is to know which charity to support and why. Ask your customers, my guess is that even by asking you will start to elicit the warm fuzzy feeling that increases brand loyalty. Bringing your customers closer.
Relationship maintenance.
This is the primary driver behind many gifts at Christmas time. You may not have seen your Aunt Margaret since last Christmas but still you feel compelled to buy her a gift. It’s a way of conveying an emotion and delivering a tangible token of that emotion, an appreciation for all they do or once did for you. It says “Look, I know we may not see each other often but I want you to know that you are part of my family and I like that. We’re still close and don’t need to see each other all the time for that to be true”. Or perhaps it says “I know that if I don’t give you a gift, you won’t be happy and then you’ll talk to your sister, my mother and I’ll have to listen to that – so here’s a nice candle”. Either way, gifts are a way of maintaining a relationship no matter how distant.
Some may find it easier to give a small gift to express their love / care for a family member or friend than they would ever find it to actually tell them how much they mean to them. To this end, people all over the UK and Ireland and indeed the world are currently making lists that include people they rarely see but feel compelled to include.
In recent years, there has been a revival of the tradition known variously as Kris Kindle or Secret Santa. You know the drill, a group of people who may know each other well but not so well that they need to buy each other ‘special’ gifts – decide on a relatively modest gift budget and a date for the gift exchange and then the fun commences. Many companies run Secret Santa – it is very popular in workplaces. If you have taken part, you will know that you are invariably sent the name of someone you had a brief chat with once and whom you don’t know well at all. What to gift them? And, for our purposes today, why? Why will you jump on to Amazon (thousands of gifts for Secret Santa) or walk the aisle of your local supermarket searching for the perfect gift for someone you don’t know? Well, because the societal norm dictates that you must, and it helps to retain the working relationship equilibrium; that’s why. Tip: nobody remembers the candle, buy them something different, to at least give them a smile.
So what?
Many gifts are just small tokens that are expected, but the giver doesn’t want to spend hours researching a buying them. Brands can help their loyal customers here. Imagine if Nike launched a range of Nike accessories that had people’s names on them? Or if kids’ books could be personalised easily with your nieces and nephew’s names and characteristics? Or what about poor Aunt Margaret? Surely there is room for a brand like M&S to do an Aunt Aisle? Sounds daft, yes but would it benefit customers and be used – you bet it would. By realising that not all gifts are the same, some are less involved and by facilitating this purchase, big brands can help their customers. Maybe start by asking them what works for them. Bring them closer.
Reciprocity
All over the UK, Ireland and beyond, on Christmas Eve there will be a stash of acceptable gifts hidden just inside the door of homes. These are often bottles of wine, perhaps chocolates or maybe flowers. These are emergency gifts. Ready and waiting for when the unexpected neighbour drops in with a gift to the household. They can quickly be put into action and handed over to save face. The truth is when someone receives a gift, they feel they must offer one in return or else be perceived as rude. Indeed, I would go a step further and say that the joy of gifts is usually in the giving rather than the receiving. The awkward exchange of one-way gift giving is too much for many people… hence having generic gifts at the ready.
Of course, this two-way exchange helps the Christmas till buzz throughout November and December as nobody wants to be in this situation – they don’t want to let people down is what they will say, and they don’t want to suffer the social embarrassment is often what they will mean. Clearly, people have a choice here. We could decide not to do gifts this year. We have seen it happen – after all, who needs more socks from people we rarely meet? However, I would argue that we are the poorer for that. A gift is often just a fancy handshake. A way of opening a conversation and from that relationships are strengthened.
So what?
Retailers know about the reciprocal affect and are already pushing as many boxes of sweets onto their customers as possible. Token gifts fill trolleys everywhere. I do see an opportunity here for home delivery retailers to offer small gifts themselves at Christmas. Tesco delivery drivers offer a small pack of mince pies. Deliveroo drivers offering free chips? Postal workers offering a small calendar? In this seemingly small exchange, the brand is elevated from service provider to life facilitator. They will no doubt leave with more than a handshake in return but if they even get that handshake, that smile, then the effort has been worthwhile. Brands need to know their role is more important than just providing stuff. Ask your customers how you could step beyond the traditional role. Could your local filling station add some antifreeze to your car and offer you a glass of non-alcoholic mulled wine at Christmas? Of course they could. Does this all sound very Disney? Perhaps, but brands can use a gift-giving season such as Christmas to elevate their role in the lives of their customers and create goodwill for the season ahead.
So what?
Christmas is a very busy time for customers and brands. However, by taking a step back, brands can create truly memorable customer experiences, and this will create more customer loyalty. Be the brand that does more than just stick a box of chocolates at the till, curate that experience no matter how small and watch how customers respond. Go one step further and to understand what that step may be, ask your customers. Who doesn’t want to tell you how to spoil them!
If the Bible story is to be believed, three men arrived in a stable and all bore gifts. On the day you were born, it’s likely people arrived with gifts. It means so much to your family and friends that every year on your birthday they continue to buy you gifts. You just need to be you and show up. Gifts are a powerful symbol of emotion, be that gratitude, love, respect or just generosity. They are a material way of expressing what is quite often anything but material.
We spend billions on gifts every year – it’s a very noisy marketplace. Brands can capitalise on this by playing their part to understand what gifts meant to their loyal customers and how they can facilitate a better experience. By doing this, brands can show that they understand their customers better. This will lead to more sales, a closer brand-customer relationship and is likely to open opportunities that neither has yet envisaged. So don’t sleepwalk through the Christmas gifting period. Engage with it and your customers to create a memorable occasion for everyone involved.
LifeStars is the customer closeness app that helps brands create simpler, quicker, and more cost-effective research plans. With LifeStars on board you can quickly know what is on your customers’ (and your competitor customers’) wish list this Christmas.
If you would like to know more about how LifeStars can work for your brand, please contact hello@lifestars.com. Let’s bring your customers close and create truly effective brands built on common values, long-term goals, and positive relationships. Sound interesting? Get in touch today.
