How Behavioral Economics of Gifting Impacts Commerce Magento Imagine 2014 Session

This session is titled The Gifter’s Dilemma: How Behavioral Economics of Gifting Impacts Commerce and is presented by Kristen Berman, Co-Founder, Irrational Labs and Roy Erez, Co-Founder & CEO, Loop Commerce. Buying gifts is challenging - is it the right style? Size? Will they like it? Is it the best possible gift?

There are financial relationships and social relationships. Gifts should be focused on the social aspect of relationships. A gift is an absolutely personal and thoughtful gesture that retailers are trying to facilitate.

Gift sections, gift registries and wish lists are a good way to facilitate gift purchases on your eCommerce website, but it's not enough.

Social rewards motivate people more than monetary rewards.

Giving physical gifts is more social; giving cash is more financial. Registries and wish lists fall on closer to the financial side of relationships.

Giving items from a wish list or registry are perceived as the same as giving cash or gift cards - impersonal and provide less social benefit.

Gift receivers that were surveyed preferred risky gifts - even if the gift isn't something they like. The least appreciated gifts were cash and gift cards.

Merchants should work to make gifting more social than transactional. A few ways to do this:

  1. Remove price from the gift - gift receipts
  2. Reduce the risk of gifting
  3. Make exchanges easy
  4. Help gifters show the effort (but not the price) they put into the gift
  5. Create opportunities for gifting
  6. Gifting is a year-round opportunity

Gift giving today does not make it easy for people to succeed at gift giving - we have to help people give more gifts that are in the social domain and are a bit risky.