Why Do We Give Gifts?

From birthdays, to weddings, to holidays and graduations, the act of gifting has become prominent in modern society. A study by retail consultancy Unity Marketing reveals that, on average, gift givers spend over $1,800 per year on gifts, gift wrap, cards and other gifting accessories. That would suggest that the average American spends 5.6% of their annual income on gifts (based on the U.S. Census Bureau’s 2017 median income per capita)!

But why? What compels us to spend a meaningful portion of our annual income on giving stuff to people? The answer to that question is complicated, but suffice to say that two human desires have perpetuated a gift giving culture for thousands of years. One, humans want to be liked and two, humans are competitive.

Like Me, Please

Whether we are providing a house guest with a warm meal, bringing donuts to the office on a Friday morning or buying a wedding present for a close friend, we tend to extend gifts not just to express gratitude but to strengthen the bond we already have with the people around us. 

Humans are social creatures and gifts are a social lubricant. Gift givers carefully make selections based on detailed knowledge of the recipient, which makes the gift giver feel invested in a relationship. As a result of this careful consideration the recipient is more likely to find the gift to be thoughtful and therefore the recipient feels liked because someone invested time and money in getting them a gift. At the end of all this, everyone involved feels good about the exchange. Social lubricant

But Compete With Me, Too

In addition to creating the feeling of being liked, gift giving also plays a role in feeding our competitive spirit. Marcel Mauss, a French sociologist, published a book in 1925 that explores the role that gift giving plays in society. In his book, titled An Essay On the Gift: The Form and Reason of Exchange in Archaic Societies, Mauss theorizes that yes, gift giving creates a bond between two people who want to like one another, but he also emphasizes that there is a competitive and strategic aspect of gift giving. 

Mauss believes that gift givers are merely creating a benchmark by which the reciprocal gift will be judged. In other words, rarely are gifts given without the expectation that the gifter will receive a gift in return. And the return gift need not always take place immediately after the first gift, nor must it be a physical good, instead it could be a relationship or a favor of some sort. And according to Mauss, this obligation to at some point give a gift to the person that gave you a gift is also a chance to compare who gave the best gift! Sounds like Marcel Mauss would have been a tough gift exchange partner.

What Does This Have To Do With Personalized Gifts?

Since we are naturally compelled to give unique gifts (like me, please + compete with me, too), gift giving culture continues to evolve both in the type of gifts and the reasons to give gifts. Friend having a baby? Get your friend a gift. Kid getting good grades? Get your kid a gift. Holidays? Get everyone you know a gift. There are numerous reasons throughout the year to give someone a gift, hence the $1,800 annual gift spend per person.

But it hasn’t always been this way. The increasing popularity of gift giving during the 19th century helped propel gifting from a nice-to-do activity, to an expected-to-do activity, and retailers quickly learned that personalization played an endearing role in differentiating products. But before jumping into personalization, it’s important to understand how commercial gift giving rapidly gained popularity in the 1800s.

The End Of The Year Was Already a Celebration

December has long been a month of cultural celebration for many global communities. Europeans celebrated the winter solstice, which marked winter’s peak and the gradual introduction of longer days and more light. Romans honored the god of agriculture, Saturn, in the month of December, and other cultures celebrated a successful harvest by indulging in the fruits of their labor. In other words, they drank a lot of wine, ate a lot of meat and danced for a month.

Then, as religious leaders sought to celebrate the birth of Jesus they elected to hold Christmas celebrations around the same time as winter solstice celebrations, a decision they believed would increase participation in Christmas. Early references to gift giving during Christmas, such as the wise men providing gifts to Jesus and the legend of a gift giving bishop named Saint Nicholaus, indicate that gift giving was slowly becoming a holiday tradition. Over time, holiday celebrations became less about celebrating the year’s harvest and more about celebrating friends and families, part of which meant small gift exchanges.

The Book That Popularized Gift Giving

One of the key developments that led to gift giving becoming a prominent part of the holiday season was the release of Charles Dickens’ novel A Christmas Carol. The book was first published in 1843 at a time when new holiday traditions, such as Christmas trees and family gatherings, were being explored. 

The story details the transformation of Ebenezer Scrooge from a selfish, unkind businessman to one who embraces the spirit of generosity and spreading good cheer among his employees and his community. The book’s positive message was well received and further helped shape Christmas into a season of selflessness, giving and generosity, especially towards children. 

The Book(s) That Popularized Personalized Gift Giving

Although humans have exchanged gifts for as long as civilization has existed, modern gift giving culture didn’t accelerate into commercial success until retailers put marketing dollars behind seasonal gifts. As new holiday traditions set in during the mid-nineteenth century, retailers gladly embraced the trend and began promoting holiday gifts. This period also coincided with the rise of the American middle-class, which provided economic support for discretionary holiday spending. 

Among retailers, book publishers were an early mover in the commercialization of gifts. Given the technical innovations in publishing, books could be produced in high numbers and book publishers were in a unique position to create special, limited release versions. During the early 19th century, book publishers began marketing and selling special books meant specifically to be purchased as gifts. These books were aptly named “gift books” and would become one of the first product categories to propel the gifting tradition into high gear. In his book The Battle for Christmas, Stephen Nissenbaum states that books made up over half of the early items marketed as Christmas gifts.

Early gift books were ornate in design and presentation, which publishers hoped would distinguish gift books from traditional works of fiction and non-fiction. Often the books were presented in a dust jacket, included illustrations and featured embossed leather covers. Given the success of holiday gift books, many publishers entered the market and the category became crowded with competition. Although the full history of the category is beyond the scope of this article, you can read much more about these books in this post by Kevin MacDonnell (https://www.abaa.org/member-articles/the-american-gift-book).

One subtle element of gift books that foreshadowed what would become a popular gift theme was the inclusion of “presentation plates.” Presentation plates were placed on gift books and used by a gift giver to inscribe the book as a gift, including the name of the gift recipient and perhaps a special message for the recipient. This low tech form of personalization, coupled with the success of gift books, would portend the continued development of personalized gifts.

Fast Forward To The Next Tectonic Shift In Personalized Gifts

With the commercial gift market firmly established as a holiday tradition, and keeping in mind that humans have a subtle competitive gifting desire, personalization would continue to evolve and stand out as a unique way for gifters to impress giftees with a differentiated and thoughtful present.

During the early 2000s the gift market would begin a period of rejuvenated growth as the Internet enabled shoppers to peruse inventory across an endless number of worldwide retailers. The shift from brick-and-mortar-retail to digital commerce has been well documented and the graveyard of retail businesses is lined with once-familiar brands such as Blockbuster, Toys R Us and Sears. Many traditional off-line businesses continue to face headwinds as retail spending shifts to the Internet. 

But the Internet has done more than enable consumers to shop from the comfort of their pajamas. It has also reshaped the face of gift giving. For the consumer, research and reviews have become central to the buying process, while advances in shipping and logistics have made it possible to have nearly any retail good delivered to a residence. For businesses, the Internet has spurred rapid product innovation that has enhanced personalized gift capabilities. 

A New Era Of “Just-In-Time” Gift Manufacturing

Today, we live in a retail world that has unprecedented access to on-demand production and customization for both businesses and customers. No longer do stores need to produce massive runs of speculative, personalized inventory so that local tourist shops can display the top 50 most common names printed on shot glasses. Nor does the consumer seeking personalization have to select items from a catalog, wait weeks for a custom print run, then hope that everything was properly transcribed.

Instead, just-in-time production has become commonplace, which means that gift producers can collect your specific order, personalize your item during a single product run, then ship that product to you. And before a purchase is approved there is an opportunity to proof the item to check for order accuracy.

So You’re Telling Me The Internet Invented Personalized Gifts?

Not quite. Early gifts, think thousands of years ago and before gift books, were essentially all personalized because they were generally handmade in the moment for a specific person or occasion. Manufacturing technology did not yet exist and retailers mostly sold commodities that were necessary for daily life, not accessories that were meant for gifting. 

Although one can understand how these handmade gifts could be perceived as personalized, the gifts were not necessarily tailored for the giftee, instead the lack of manufacturing technology meant that the gifts had to be handmade.

Personalized Photo Gifts A Fast Growing Sub Category

Another contributing factor to the growth of personalized gifts has been the increasing ubiquity of photography technology. Prior to smartphone and digital camera technology it was common to see drugstore retailers offering in-house film processing. Retailers would develop pictures, sell film, sell cameras and advise customers on printing large images for things like posters. One hour film development was a selling point for many drugstore retailers.

In addition to developing film, retail photo developers also popularized the idea of printing pictures on giftable items, such as shirts, mugs, blankets and photobooks. Who doesn’t want a flannel blanket featuring their picture?

Today, it’s rare to see a staffed film processing counter at all. Instead, drugstores often have kiosks at which digital photos can be printed, and the personalized items are no longer ordered at the photo counter. Instead, they’re ordered online.

The growth of digital cameras has significantly diminished the use of film and has largely pushed traditional film development by the wayside. Even still, photo personalized gifts remain a popular item and represent a large portion of the total personalized gift market.

Four Primary Photo Personalized Gift Segments

1. Wall Decor - Examples include personalized canvases, signs, posters and photo collages.
2. Photo Cards - Estimated to represent 40% of revenue in the photo merchandising market. Examples include greeting cards, birthday invitations, wedding invitations and photo personalized postcards.
3. Calendars - Popular as business giveaways, family gifts.
4. Photo Gifts - Includes photos printed on everyday items, such as mugs, towels, shirts, ornaments, etc. 

Personalized Gift Market is Growing Rapidly

According to consumer research firm Technavio, the global personalized gift market is expected to grow to $31.6 billion by 2021, which represents over 50% growth from 2016 when the market for personalized gifts was estimated to be $20.5 billion.

The Internet has enabled retail production advances that have opened up new possibilities from a personalized gift perspective. And given that gift givers are prone to seek out unique gifts, personalization stands to continue to be a popular way to provide distinguished gifts.

Primary Non-Photo Personalized Gift Segments

In addition to photo personalization, retailers offer personalized gifts that do not require a photo. The primary categories in this segment are:

1. Wearables/Accessories - Examples include shirts, jackets, iPhone cases, backpacks and socks.
2. Stationary/Cards - Popular category that covers thank you cards, notepads and invitations.
3. Decorations - Household items like pillows, blankets, candles or seasonal decorations
4. Kitchenware - Items such as bottle openers, glasses, koozies, dish towels and cutting boards
5. Toys - Includes a wide variety of items that can be personalized with names, colors or other variable features.

Season For Gifting Becoming A Year Round Thing

Although Christmas jump-started the gift giving tradition, the culture of gifting has slowly become a prominent facet of our non-holiday lives. A Unity Marketing study found that about 45% of gift spending goes towards holiday gift buying. This suggests that 55% of gift spending occurs outside of the holiday season.

Top Non-Christmas Gift Occasions

Outside of Christmas, the top occasions during which gifts are exchanged include:

1. Birthdays - The most prominent gift giving occasion outside of the holiday season. This includes gift exchanges related to the birth of a child (baby showers, for example).
2. Weddings - Registries for married couples are common and are a big business. According to this Forbes article the wedding gift industry is a $19 billion market.
3. Special Days - Valentine’s Day, Mother’s Day and Father’s Day, to name a few.
4. Anniversaries - A continuation of the wedding gift tradition.

Where Does The Gift Market Go From Here?

Driven by human desires to be liked and to compete, gift giving has become an important societal tradition. Couple that with support from retailers, who continue to promote gift giving and also continue to push gift innovation, and the gift giving culture is here to stay.

With continued advances in gift technology, such as 3D printing, it is likely that gift personalization will continue to evolve and will remain a prominent category for gift givers. But no matter the direction, remember that gift giving is about the spirit of generosity and making those around us feel good, even if Marcel Mauss doesn’t agree!