U.S. Holiday Gifts Will Be Practical And Purpose Driven

Consumers are driving a shift for the Holiday season toward more practical gifts and also toward products made by companies that are purpose-driven beyond earning profits. 

Holiday gift-giving and consumers’ purchases for themselves will increasingly focus on at-home living. This category will drive 15% growth in U.S. appliance and houseware sales this holiday, according to NPD. 

Brian Hashemi, head of marketing & analytics Uncommon Goods, an online marketplace for unique goods, stated, “We are definitely seeing shifts in what is selling. Sales for items that help with keeping yourself entertained at home – puzzles, for example – peaked during the early part of the pandemic, and have maintained an impressive amount of momentum the entire year.” Uncommon Goods is a founding member of an alliance of companies committed to using business as a force for good. By passing an in-depth screening, it officially became one of the first B Corporations.

Holiday shoppers want to provide practical gifts

In a consumer survey conducted by the buy-now-pay-later fintech company, Sezzle, 42% of respondents stated they plan on giving a more practical gift. Broken down by age group, 44% of Gen Zers and 56% of Baby Boomers responded as such, while about 35% of both Millennials and Gen Xers expressed this commitment.

Veronica Katz, Chief Revenue Officer of Sezzle, stated, “The trend towards practical gift-giving — most evident in the older cohort — suggests that more mature shoppers are viewing this holiday season as a moment to gift younger family members with things they actually need, a trend likely stemming from the economic hardships borne out of the pandemic.” Katz defined practical gifts as products that help the work from home situation, masks, planners, reusable shopping bags and gift cards to local restaurants. 

Consumers will also look to support local businesses reeling from the pandemic by purchasing gift cards to neighborhood shops and restaurants. The Saturday after Thanksgiving is designated as Small Business Saturday, but this year with various social restrictions across the country, even local shopping may revert to online or curbside pick-up. 

Companies responding to the voice of the customer

As more and more companies are declaring themselves purpose-driven beyond making money, the call to action stems from a shift in consumer preferences toward buying products from companies that exhibit broader goals, including environmental and social initiatives.

Leading the movement back in 2015, REI #OptOutside declared Thanksgiving and Black Friday a day to spend with family and friends outside. In 2015 and every year following, REI has given employees Black Friday off with pay, closing its doors on one of the largest shopping days of the year. Ben Johns, general merchandising manager for action sports of REI, recently stated, “Getting out into nature is one of the best ways to stay balanced during this stressful time, and our numbers are showing more Americans are doing just that”. 

REI annual sales announced in April 2020 were 8% ahead of last year, and according to the annual report, each year REI returns about 70% of its profits back to the outdoor community, supporting employee retirement, helping fund trail work, returning dividends to members and supporting nonprofits that help get people outside.

Beyond profits

Many companies have followed suit over the past few years, but the 2020 Pandemic has given extra motivation to reconnect with nature and to shop at companies that are purpose-driven beyond making profits. Consumers want to feel connected to the business where they shop.

In the TotalRetail virtual event, Ellen Kresky, Global Creative Director of Ben and Jerry’s (owned by Unilever), discussed a program called Operations Joy where employees were challenged to come up with ways of connecting to customers in an environment of online ordering and contactless service. Kresky gave examples of showing customers fun things to do with an empty ice cream container or creating Ben and Jerry’s adult coloring books. 

Creative outreach initiatives like these make consumers feel more connected and it counts in terms of future purchases. Ben and Jerry’s contributed to Unilever’s increase in eat-at-home ice cream sales by 15% and 26% for the first and second quarters respectively. Ben and Jerry’s is a certified B Corporation, which is the highest standard for social corporate responsibility. Each year the company reports on its social and environmental performance. 

Sezzle and MIT-founded apparel brand Ministry of Supply announced a joint-initiative to support Americans in need of a fresh start with “Pay It Forward with Starter Kits.” The program will gift thousands of kits (clothing and masks) to Americans as they prepare for upcoming job interviews, pursue fresh starts, or simply need new, quality clothing. “As a Public Benefit Corporation, Sezzle is committed to giving and supporting communities in need,” said Katz. Sezzle’s third-quarter merchant sales increased 232%. 

A recent Zeno survey revealed that global consumers are four to six times more likely to trust, buy, champion and protect those companies with a strong purpose over those with a weaker one. According to the survey, just as consumers are willing to give their dollars and voices in support of purposeful brands, they are equally inclined to punish those with which they disagree.

Practical and purpose-driven

For this holiday period, consumers are living amidst both political and social unrest and are dealing with rising cases of coronavirus. They are deciding where to spend money during the holidays and companies that are addressing society’s top concerns are faring very well. Gift giving in the era of the pandemic will be practical and purpose-driven.