How can we grow our business in the gift giving market?
Question: After 11 years, we’re still a struggling gift shop. We had some eight years of good business but three bad years. There was a year when we thought we’ve finally made it. That was the year when our son got us into online selling. But after less than a year, we were back where we started. Our son couldn’t tell us why. He said his college subject didn’t cover this problem.
These past two years were really bad, especially during the Christmas season.
Christmas or December used to be our best month, accounting for as much as 30 to even 40 percent of our annual sales. Our son kept telling us that his college marketing class prescribed that we should expand and be more than just a gift shop. Those are nice words to hear, but my husband and I are wondering how we can become more than just a gift shop.
We’re regular MRx column readers. Our son says if we ask you, you’ll say the same thing that he’s telling us regarding how to grow our business. So we thought we’d ask you. Please help.
Answer: Your son is partly right. I will start by saying that you may want to be more than just a traditional gift shop. But I won’t stop there. I’ll add a few more specific MRx’s.
Let’s begin with a diagnosis. Among other things, growing your gift shop business is about changes. But because there are so many changes around, you have to learn what particular changes to go after.
You actually went after one change that mattered. That was a change in market segment targeting. You entered the online gift-buying market segment. That this experience didn’t work out “after less than a year” was too short a time to merit the decision to leave. Your son should have helped analyzed why. I’m of course not saying that your son is at fault. He does not have the working experience to help with the required problem solving analysis. Since you did not provide the specifics of the situation, I will leave this subject and return to the subject of pursuing sources of business growing changes.
Your 11 years in the gift shop business is long enough for you to consider long-term changes that define trends in consumer gift buying and giving. Trends tell you where specifically to take your gift shop for more and better revenue productivity. There are three related gift giving trends that you should learn about and explore. Ask your son for help in learning more. You and your son must learn from each other.
One emerging gift giving trend is about food gifts or specialty foods. When a giver doesn’t know what to give, a food gift is the “safest” gift. In most cases, the receiver is sure to like it unless the food gift is the wrong food like giving Chinese ham to a hypertensive.
Over the years, corporate giving has become more about food gifts. So when you go after the corporate giver segment, be sure your gift product lines include specialty foods.
It’s a pair of keys to success: the right market segment target and the right product offer. Not just one but two of them together.
Another gift giving trend also takes the character of the safe gift. This is the gift card or certificate (GC). It’s a safe gift and safer than a food gift because it’s up to the receiver to decide what to buy as his or her gift.
For a gift shop like yours, it’s a simple or simpler promo strategy serving several purposes. Your gift shop customers will find it hard to ignore especially if you train your shop attendant to support your store GC with suggestive selling. Again, with suggestive selling, GCs give your shop customers a good reason for repeat purchase.
How do a good number of shoppers regard a GC? My research has found them thinking of a GC as equivalent to a discount. So when they use a GC, these shoppers usually buy an item that costs much more than the GC value or else buy another item that goes with what the GC covers. In either case, the buyer ends up spending more than what she initially planned to spend. When that happens, it’s additional revenue to your gift shop. This is why GCs are one of my favorite continuing customer habituating campaigns. For its benefits to both customer and store, you should regard GCs as a source of regular revenue booster.
A third and related trend is what Rustan’s has become known for to many wedding gift shoppers. That’s the wedding or bridal registry. And you don’t have to limit your gift shop to wedding occasions.
Throughout the year, there are several occasions that customers celebrate: wedding anniversaries, birthdays, awards and several others.
So why not a gift-giving registry for several of those occasions for your regular and loyal gift shop customers?
The great singular advantage of this selling campaign is for your customers, especially your current ones.
This market segment is your first and largest responsibility to keep. It’s the segment for nurturing and deepening customer relationship.
Like the GCs, in gift registry, it’s up to your customer to choose what to get or give as gift. The risk of an unwanted or a duplicate gift is avoided. Gift givers whom I’ve surveyed expressed real appreciation for this store service.
So the next time you adopt a change and join a trend, and it looks like “it’s not working,” analyze why before giving up.
Most ideas for market segment and/or product innovations take time to give you the returns you expect. And when you analyze, please avoid underanalyzing and persist. Persistence includes continuing to ask your son for help. In pursuing change, have more than one option. Have two or three and have a pair or even a triad for each option. That’s broadening your chances of hitting a winner or winners.
Keep your questions coming. Send them to me at email@example.com. My best wishes for the New Year to you, my dear readers. And thank you for 2015.