5 Learnings From The Holiday Season And What It Means For 2018

  • Written by  Monika Kochhar, SmartGift

Monika Kochhar SmartGiftHolidays 2017 marked the beginning of something new — a collective effort by retail and retail technology to improve the gift shopping experience for the customer. 

Remember those days when we scrambled to get our holiday shopping done in between lunch breaks and on the very last day frantically ran from store to store until five minutes before they closed? In the end, we ended up spending more than we intended on suboptimal last-minute gift purchases. A kitschy vase for Aunt Lulu, the twentieth turtleneck cashmere pullover in a row for daddy, another gift card that might be forgotten in the drawer. This year's holiday gift shopping was done in a mobile minute, saw people exchanging more personalized presents and thinking twice about giving a gift card.

It turns out that we were right on the money in our December Holiday Forecast for RTP. We expected that gifting would see a 4% to 6% YOY increase given the current consumer confidence and ease of online shopping. According to Mastercard’s Spending Pulse report for holiday 2017, holiday sales were up 4.9%, the biggest increase since 2011.

Personal and experiential gifting has come of age. It will see major adoption in 2018 as it becomes a critical driver of customer experience, occasion-based marketing strategies and revenue. Here are some insights from the SmartGift platform from this holiday season.

1. Personalized Gift Shopping Experiences Boost Engagement And Conversion

Holiday (gift) shopping was a prime example of how technology and good experience design pushes KPIs. Gift shopping can be a nervous undertaking that leads to shopping cart abandonment. Will she like it? What's her size? Will it arrive on time?

This year, with the “smartgift” option, our brand partners saw 2X increase in customer engagement with longer session duration, significant reduction in bounce rates on product detail pages, and overall higher purchase conversion on gifting transactions. Digital gifting in 2017 became more experiential, sophisticated and easier to enable. Our partners’ customers had the biggest nods and happiness.

2. Gift Shopping Happens Later And Later

This holiday season retailers used more interactive ways to remind their customers about shipping cutoff dates. For example, Barnes & Noble offered a prominent countdown clock on its site informing customers of the cutoff dates for different shipping options, and TUMI used notification emails alerting existing customers about approaching dates for cheaper shipping options.

Gift shoppers still came in at the last minute past shipping cutoff to send smart gifts. With “long distance,” “left it too late and won’t arrive on time,” “was too busy wrapping up the year,” and “was still deciding on what to gift” being the strongest motivators. Mobile device gifting traffic for our partners ranges from 42% to 67%, with one seeing up to 73% on Dec. 24/25.

We were intrigued by Dec. 26/27 gift purchase spikes in smart gifting. The bulk of these gift purchases were “thank you” and “guilty that I didn’t get you something” gifts.

3. Combatting Gift Returns

In online retail, the National Retail Federation (NRF) estimates that the figure for returns is 15% to 30%. For apparel retailers, it can be as high as 40%. With this ongoing financial and operational pressure on retailers, reducing returns makes for one of the next big battlegrounds in e-Commerce.

The disappointment for a recipient who unwraps a gift that she'd absolutely never use plus the added nuisance of repacking the item and sending it back to the retailer for an exchange creates a subconscious negative brand experience.

Charlie Cole, Chief Digital Officer for Tumi, which operates about 170 U.S. stores, and who has been one of the earliest pioneers to adopt the "smartgift" option, says "Tumi added a ’smart gift’ option, a way for a buyer to tell a recipient by email that a gift is en route, and for the recipient to specify preferences such as color of a bag. It is likely to cut down on returns,” he said. 

With smart gifting for fashion brands, a whopping 39.6% of gift recipients changed a product attribute and 11.0% exchanged the product altogether — in other words, only 50% of sent gifts were accepted as is. 

4. Experiences Will Take Over Digital Gift Cards

The NRF already reported in 2016 that holiday gift card spending has dipped for the first time since 2009 and that the gift card is showing signs of fatigue. Adoption of e-gift cards has been slow in terms of total volume — CEB TowerGroup estimated that e-gift cards will account for only 11% of the total gift card volume in 2018 despite having been around for over a decade.

It seems that handing over a physical card that can be accompanied by a nicely wrapped box and a personal handwritten note still makes for some kind of personal gift, whereas sending an electronic gift card amounts to nothing more than wiring cash.

Mastercard’s Sara Quinlan recently noted in a publication that gift cards did not have a bad year per se — but did have something of a flat year. “They are also increasingly more secondary gifts given alongside a major purchase — as opposed to the starring player they’ve been in years past — as consumers have gotten increasingly focused on personalization in the last few years.”

It is easy to see how the e-gift card will eventually become just a transactional method in the age of experiential tech. Person to Person gifting is a beautiful and thoughtful moment. Technologies that recreate that interaction and augment it digitally will win.


2017 has been a year of fascinating innovation in retail technology with tangible benefits for shoppers. We have arrived at a new era in commerce that truly removes shopping stress and helps many of us become better gift givers and happy gift recipients. Stay tuned for more interactive experiences in 2018.

Monika Kochhar is the CEO and Co-founder of SmartGift, a gift experience and marketing platform for enterprise brands and retailers. She previously co-founded a data driven music platform that was acquired by a subsidiary of Sony Music and has traded retail and tech on Wall Street. She is an alumnus of London School of Economics and Mount Holyoke College. Kochhar is a champion of women in tech and advocates for girls in STEM. Her articles and thought pieces have been published in Forbes, Huffington Post, Entrepreneur and Intel Mag, among others. 

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