Gifting Online & Offline: A Seasonal Analysis

The next time you’re shopping online and moving toward checkout, pause and think about the gift wrapping option. Your gift recipient gets a nice little package, but the retailer or manufacturer gets a nice little gift as well. These folks can learn a lot about their consumers by analyzing their gifting behavior – intelligence which can translate into huge profits when put to use.

EMarketer estimated 2010 U.S. holiday ecommerce sales at $38.5 billion, and total ecommerce revenues on an annual basis checked in at $152.1 billion. If we assume the total value of online gift purchases somewhere between those two numbers, and the reported ratio of online to offline sales holds true (between 3 and 7 percent of total), it’s clear that the total gift economy in the United States (combined online and offline) is worth at least half a trillion dollars – and probably much more than that.

It’s not an easy number to nail down; we know from our research on the ROPO Effect about the nebulous limbo that resides between online research and offline consumer behavior. But that’s where relativity comes in.

The keywords 'gift' or 'gifts' are queried approximately 200 million times a year in the U.S. Naturally they don’t mean a whole lot by themselves, but when tied to modifiers to research products like ‘gift card’ or ‘gift basket,’ the plot thickens. 

With added focus on seasonality, we observe relative shifts in this activity, around holidays and other special occasions. And where better to dig into trended search query data than Google Insights for Search?

This tool reports search query volumes (since January 2004) as a normalized index value pegged to the highest value for a time period. In other words, on the day a particular keyword saw its highest search volume, a score of 100 would appear – and every other date since 2004 would be measured on a 0-100 scale relative to that peak value. (Click for more on how Google Insights values are normalized.)

Using this tool we created a metric to gauge relative shifts in search activity, and find patterns to better explain nuanced gifting behavior from a search engine perspective. We’ll call it the Average Search Volume Index, or ASVI. (Google Insights reports search trends at the weekly level, but we chose to aggregate these to monthly.) 

When we see ASVI rise from month to month, we know that search query volumes have risen relative to whatever their peak may be. Using this approach we treated each of Google’s 27 search query categories as a unique subset of data (for the complete list, see Footnote).

Here’s where they begin to show their individuality.

Gift-related Search Activity During the Holiday Shopping Season

Let’s start with an easy one. We know that the vast majority of online shopping activity begins with a search engine. So what do we see in terms of gift-related search engine queries? 

Below is a categorized view of the percent growth in Average Search Volume Index (ASVI) from October to November:

01-growth-asvi-oct-nov

Ever notice how many ads for digital cameras you see around the holidays? Photo & Video sees the biggest rise in overall search interest from October to November. This includes everything from equipment (camera, accessories, etc.) to software, sharing and printing services, and professional services.

Other categories of note: 

  • Food & Drink (cookware, also gift certificates to restaurants)
  • Beauty & Personal Care (always a winner with comparison shoppers)
  • Recreation, Sports (people already making plans to come out of hibernation in the spring?)
  • Computers & Electronics (know anyone who likes these as gifts?)

Gift-Related Search Activity During the Early Holiday Shopping Season

There are a lot of proactive consumers who start chipping away at their holiday gift shopping ahead of schedule. Certain types of gift purchases also require significant research or feedback and reinforcement from others who know the recipient well. Judging by growth in ASVI from August to September, Recreation tops this list by a long shot:

02-growth-asvi-sept-oct

Clearly the amount of effort to plan boating, cycling, hiking, hunting, fishing and other types of trips and vacations call for added time to research and mull options.

Other categories of note: Food & Drink, Beauty & Personal Care again weigh in heavily. News & Current Events (especially gift subscriptions to newspapers and magazines) had a strong showing here, too.

What About Other Gift-Giving Periods Like Graduation Season Every Spring?

No, people don’t just buy gifts at year’s end. With most education degrees handed out in the middle of spring, May can be a busy month for gift-related search activity. 

The Society category scores highly for one key reason: keywords like “graduate” appear in the search engine query, skewing the results toward the Colleges & Universities subcategory which appears within this category:

03-growth-asvi-apr-may

For that reason, it helps to look a bit further down the list for other patterns. Two mainstays from the holiday season, Recreation and Photo & Video, again appear prominently: give a grad a vacation, or a camera to record it. The Shopping category (which includes coupons, auctions, shopping portals, product reviews, and offline retail) generally represents a sophisticated, perhaps more urgent type of gift giving – such as when you realize graduation is a week away and you still need to buy a gift.

To Be Continued…

Next time, we’ll look at a few other important data sets within this gifting context: 

  • Back to School shopping season
  • General decline in gifting during summer months
  • A few holiday gift categories which cool down considerably in December

These insights are only as good as the execution that follows – so we’ll be sure to tell you how to put all this to use.

Footnote. The following categories of industry classification are used in this data set: Arts & Humanities, Automotive, Beauty & Personal Care, Business, Computers & Electronics, Entertainment, Finance & Insurance, Food & Drink, Games, Health, Home & Garden, Industries, Internet, Lifestyles, Local, News & Current Events, Photo & Video, Real Estate, Recreation, Reference, Science, Shopping, Social Networks & Online Communities, Society, Sports, Telecommunications, Travel.