Earlier, gifting was mainly concentrated during festivals. However, in today’s corporate world, gifting is not limited to the holiday season only and has become a tool for consistent marketing and client relationships. The corporate gifting industry which was estimated to be worth $258 billion in 2022 is projected to reach a CAGR(compound annual growth rate) of 6%. 5 % growth and by 2025 will amount to $380 billion. This growth represents the fundamental drivers of more corporate gifts investments, including how the pandemic brings the change in work environments, client and employee appreciation, and the 360-degree cultural transformation on diversity and equity. So let’s turn to this great reference and look for the outstanding exponential trend and the role of corporate gifts in the modern business world.
Corporate Gifting Market Size and Growth
As per the report done by Thingsfrommars.com, the market for corporate gifting reached as much as $380 billion and it is predicted to grow even further by 2025. This projection shows the vast potential of the sector as companies continue to realize that gifting is an excellent way of deepening client relations and creating customer goodwill.
Key Factors Driving Market Growth
- Shift to Remote and Hybrid Work: The rise of remote and hybrid working has also impacted the landscape of corporate gifting. With employees spread across different locations, organizations are seeing gifts as a way of keeping people connected and appreciating them. This results in a substantial increase in the corporate gifting budget where 61 percent of the corporates who purchase gifts see their spending rise from the changes in the working models.
- Year-Round Recognition: The concept of corporate gifting or gifts for co-workers is no longer limited to the festive season only. Organizations are now rewarding their employees, clients, and partners all year round. This change is not unique to them as it is an approach that has slowly become the norm in the continuous appreciation and cultivation of relationships necessary for the growth of the market.
- Support for DEI Initiatives: The focus on diversity, equity, and inclusion (DEI) has also influenced corporate gifting trends. Indeed, 75% of the respondents state that DEI is a top strategy in gifting programs, indicating that gifts are used to help support diverse causes. Moreover, this trend is likely to increase in the future as 45% of the organizations have already integrated DEI into their gifting programs.
Survey Data and Insights
- Increased Gifting Frequency: Specifically, 91% of corporate gift purchasers claim that the frequency of gifting will grow (61%) or is going to stay at the same level (30%). Also, 89% of corporate gift-givers expect the frequency of corporate gift-giving to increase in the future at a rate of 50% or remain static at 39%. This look at the trends highlights how corporate gifting is important in maintaining relationships and driving engagement.
- Gifting Occasions: Employer recognition or work anniversary was the top reason for corporate gifting in 2022 at 66% while existing clients or partners were another reason at 52%. However, gifting during holidays experienced a slight decline to 49% from 55% in 2021 as a percentage of gifting occasions. This shift suggests more attention to the individual and tokenistic acts of kindness throughout the year.
- Spending Trends: Businesses are buying gifts of a higher price level but in smaller quantities than before. The proportion of respondents spending $100 or more on one-to-many gifts has increased, with 18% spending $100-$125, 15% spending $125-$150, and 9% spending $150+. Also, 15% of respondents who are willing to spend more have been witnessed in buying gifts worth between 4000 and 5000 US dollars, whereas 13% of respondents are planning to buy gifts that are worth more than 5000 US dollars.
Challenges in Corporate Gifting
Despite the industry’s growth, corporate gifting faces several challenges:
- Managing Gifting Internally: 48% of respondents manage their corporate gifting physically in-house without using a dedicated platform which leads to challenges such as purchasing gifts from multiple brands (33%), managing inventory, storage, and shipping (30%).
- Limited Choices: buying gift items of different characteristics (for instance color or size) encounter challenges (32%). This highlights that there is still a demand for a more varied and personal gifting database.
As a result, to address these challenges, 52% of the respondents have considered outsourcing their corporate gifts services. This trend in corporate gifting reflects the increasing shift towards the use of specialized platforms to organize and facilitate gifting while at the same time enabling access to a wide collection of products.
Popular Corporate Gifts
In 2022, the most popular corporate gifts included:
- Physical Gift Cards (53%) and Digital Gift Cards (50%).
- Gift Baskets filled with gourmet foods and beverages (48%).
- Company-Branded Products (46%).
- Experiences such as movie tickets and sporting events (39%).
Market Trends
The corporate gifting industry is expected to continue its growth trajectory, with several key trends shaping its future:
Sustainability: Organizations are incorporating green practices to meet the eco-conscious clients by using reusable, recyclable, and biodegradable products.
Personalization: Personalized gifts are greatly appreciated due to the emotional benefits they bring. Therefore tailoring gifts as per the likes of the recipients, along with customized notes to instill long-lasting impressions.
High-Quality Products: moving away from heavily branded items and focusing on functional, daily-use gifts that enhance recipient appreciation.
Self-Care Gifts: Wellness and self-care products are trending to reflect concern toward employee well-being. Therefore, spa packages, mindfulness tools, and
get-well-soon gifts are popular choices.
Inclusivity and Supporting Small Businesses: Organizations are committed to supporting local economies and diverse businesses.
Technological Advancements: Tech gifts such as wireless chargers and power banks appealing to recipients who value innovation and practicality are still preferred. Therefore, cost-effective tech options are also considered.
Impact on Businesses
Improved Employee Morale and Retention: Corporate gifts increase employee satisfaction and loyalty, resulting in higher retention rates.
Enhanced Business Relationships: Companies with formalized gifting programs are 46% more likely to meet their commercial objectives, and 82% of gift recipients have a more positive image of the company. Almost, 70% of companies prefer to do business with a firm that offers personalized gifts.
Increased ROI: Companies that use corporate gifting receive a 50% better return on investment (ROI), indicating the usefulness of gifting tactics in achieving company success.
Final Words
As companies come across the difficulties of the corporate gifting industry, they are leaning more toward gifting platforms and striving to make gifts more unique to foster more meaningful and effective gifting experiences. With the Market Expected to Reach $380 billion by 2025, the future of corporate gifting is bright. Therefore, we can state that those companies that include corporate gifting in their key business development strategies will clearly unlock new opportunities to maintain warm relationships with the employees, customers, and partners that will result in success and even greater growth in the years to come.
