Gift Industry 2.0

No one would accuse the gift and home industry of being a technology trend-setter. But that's not all bad. Being a laggard has benefits — like the ability to sidestep some bad ideas, cherry pick the best ones and adapt to fit the situation.

The Internet did not radically restructure the industry, as some had hoped or feared several years ago. Instead, the Web became an everyday business tool that increasingly infiltrates the everyday process of how companies communicate with their customers.

The biggest trend in the wholesale sector is the accelerated adoption rate of the Internet. In 2007, it feels like we are finally hitting a watershed point in usage of Web technology, both in adoption and perception. Admittedly, this has come two to three years later than some predicted — but here we are. And along with the rise in customer usage comes rising expectations. Yet while adoption of Internet technology is accelerating in our industry, we are still on the front end of the curve. Looking at a few dozen industry sites and comparing this year's numbers versus last year shows strong increases in the three key elements for online success: registrations, logins and orders.

The main factor affecting adoption is the proliferation of cheap, high speed Internet access. As mobile broadband networks deploy, this will only enhance the ability of suppliers to communicate with reps and customers.

Convenience rules. Gift and home retailers are not nine-to-five kinds of people, making a strong site even more critical as the most important communication vehicle outside those hours. Over 50 percent of visits and orders come during non-traditional business hours — nights and weekends. It's all about letting your customers engage your company on their own terms.

Retailers are looking on the Web. Though the Internet was originally thought to be primarily a reorder tool, the opposite has happened. Many new customers are finding, researching and buying online first. Up to 60 percent of online orders come from new and reactivated customers.

Reps are using it! Not only are retailers using the Web, sales reps are adopting it as well. They frequently use it for demonstrations, as an easy-to-use order mechanism and as a tool to improve customer service. Having a website that is feature- and product-rich, and includes account information (order status, histories, etc.) can greatly improve a rep's prospects.

Micro-targeting. The Web allows for niche markets and individuals to be specifically marketed to, based on their behaviors and preferences. No longer bound by the audience of a show or forced to use a one-size-fits-all catalog to present product, companies are increasingly using targeted email and websites to reach buyers. Like successful business-to-consumer sites such Amazon.com, retailers appreciate and respond to being targeted with individualized communications and experiences when interacting with the site. The Web experience can begin to rival that of a good sales call.

Cost Savings. The move toward smaller catalog print runs is everywhere. The high SKU turnover in the gift industry has always made big catalogs a major challenge. Combined with the high cost of printing and distribution, online catalogs supplementing print books is a logical place to begin using the flexibility and cost-effectiveness of the digital presentation. Product life cycles continue to be squeezed, and getting new products to market faster will grow in importance. The Web makes this easier, and Web catalogs will continue to become more important and cost effective. Buyers want to know what's hot, what's new and what's available; it's impossible for a print catalog to stay current. Add in the high cost of production and distribution, and the Web catalog is even more appealing.

Better Customer Service. How can you improve relationships with customers? Provide better service. Here again, an effective website can help without incurring huge costs. Companies are using the Web to provide customers with real-time account and order status, tracking information, and purchase history reports. It's available 24/7 online, and will result in fewer calls into the office.

Get in touch. Email addresses are surprisingly scarce at many companies. Without a dedicated effort to collect them, and a disciplined effort to use them properly, this situation will limit the effectiveness of the Internet as a sales and marketing tool.

Personalize the experience. Use the Web's flexibility to take a tailored approach. Treat customers as individuals; make the experience similar to what they experience walking into a showroom or getting a personal sales call. This includes email communications. As more suppliers use email, the challenge will be to make the communication meaningful to the individual retailer. One size does not fit all; more appropriate is the idea of “One person, one message.”

Make it easy for customers to work with you. Be open 24/7 and give your retailers and reps the tools to get the vital information they need to do their jobs (product availability, order status, order history, inventory worksheets, access to images, current pricing).

Many forces are at work changing the gift industry, and the amount of change (as well as the pace of change) is high — and still increasing. While the Internet is not the principal driver of change, it's certainly an accelerant. That acceleration is going to increase over the next few years, as the Web becomes an even bigger part of doing business. It makes sense to get good at using it.