New Delhi [India], July 30 : Gifts have been recognised as an effective means to build interpersonal relationships. However, gifts can also jump-start customer-brand relationships.
Gifts might help customers engage with a certain brand. This is how we can improve future brand loyalty, suggests a new study.
The study will be published in the 'Journal of Marketing'.
The research team first conducted a field study with an international retailer of beauty products. The hypothesis is that customers purchasing gifts display higher future purchase behaviours towards the brand.
The study found that gift buyers spend 63 per cent more in the year following a gift purchase than a matched sample of customers who purchase the brand for their personal use.
The study revealed that gift buyers increase their purchase frequency (25%), spend more per shopping trip (41%), and engage in more cross-buying (49%). The sales lift is particularly pronounced among new customers with little prior purchase experience with the focal brand.
Also, receiving assistance during the gift purchase process and branded gift wrapping represent two gift purchase design characteristics which increase the effect.
"With so much at stake, gift purchases can deepen the customer relationship with the brand, with positive impacts on key customer metrics like attitude strength and future purchase behaviours. Our research suggests that gift purchases are an opportunity for retailers to engage customers with their brand," said Andreas Eggert, study's lead author.
Marketing managers can leverage gift purchases as effective relationship-building marketing instruments in retail settings.
First, managers should identify products to position as gifts and promote them as such. Marketing managers should systematically highlight selected products in marketing communications and offer promotional incentives for consumers looking for a gift.
Second, managers should target new rather than experienced customers with gift purchase promotions.
Third, managers should facilitate the gift selection process. Retail store managers should train and encourage frontline employees to assist customers proactively in the gift selection process, to stimulate customer gratitude. Firms might also develop advanced online filters to help customers identify an appropriate product for specific gift-giving occasions.
Fourth, retailers should make their brand more prominent on gift packaging. By providing high-quality, branded gift packaging, retailers can strengthen their customers' public commitment to the brand and stimulate long-lasting attitudinal and behavioural performance outcomes.
Finally, retailers should encourage existing customers to recommend the brand to their peers for upcoming gift giving occasions.