In the dynamic landscape of retail, the gifts retailing market is emerging as a noteworthy player, poised for substantial growth. With a projected Compound Annual Growth Rate (CAGR) of 3.2% between 2023 and 2032, this market is set to expand by a staggering USD 13,364.84 million. This growth trajectory is a testament to the evolving gifting culture and a surge in demand for seasonal decorations. In 2017, the market was valued at USD 76,734 million, and since then, it has been on a transformative journey.
The Gift Market’s Diverse Landscape
Segmenting the Market
To understand the dynamics of the gifts retailing market, it’s crucial to delve into its segmentation. The market is divided based on Distribution Channels (offline and online), Product Categories (souvenirs and novelty items, seasonal decorations, greeting cards, giftware, and other gift items), and Geography (covering Europe, North America, APAC, South America, and the Middle East and Africa). This segmentation offers invaluable insights into the market’s intricacies.
The gifts retailing market owes its growth to various factors. Notably, the rising demand for seasonal decorations and the prevailing gifting culture have played a pivotal role. Seasonal decorations, which include items like decor pieces, figurines, and household items popular during holidays such as Christmas, Halloween, Easter, and Thanksgiving, significantly contribute to the market’s revenue. Moreover, personalized decorative gifts have gained popularity, becoming the preferred choice for significant occasions.
The United States, the United Kingdom, and France have been at the forefront of this trend, with high demand for seasonal gifts. Notably, emerging markets in Europe, APAC, Central America, and South America have also experienced a surge in gift sales, especially during festive occasions like New Year, Christmas, Halloween, Easter, and Hanukkah. This heightened demand for seasonal gifts has spurred the sales of personalized gifts, propelling the market’s growth.
Key Trends and Challenges
Trends Shaping the Market
A close examination of market trends reveals a growing demand for specialized merchandise in the gifting arena. This demand has given rise to a distinction between specialty merchandisers and mass merchandisers. Specialty gift stores are a prime example, often offering unique, locally crafted gifts that cater to premium customer segments. This product differentiation fosters a heightened demand for specialized merchandise, and this trend is expected to persist in the coming years.
Souvenir and gift retailers have also assumed roles as distributors of specialized merchandise. Disney, for instance, licenses its trade names, characters, and properties to various retailers and engages in retail and wholesale distribution through the Disney Store. With the increasing demand for specialized gifting merchandise, the market is poised for further expansion.
The Pricing Challenge
While the gifts retailing market holds immense potential, it’s not without challenges. One of the primary hurdles is pricing pressure driven by intense market competition. Specialty gift retailers face competition from department stores, mass merchandisers, e-retailers, novelty, and souvenir outlets. Mass merchandisers and department stores offer customers a one-stop solution for their gifting needs, which can erode the market share of specialty gift retailers.
To counter this pricing pressure, market players have resorted to low-pricing strategies, impacting profit margins. E-retailers, especially in regions with widespread internet and smart gadget penetration, can afford to offer products at reduced prices, further intensifying competition. These pricing dynamics restrain market growth to some extent, necessitating innovative strategies to thrive in the competitive landscape.
Understanding the Customer Landscape
A comprehensive market analysis includes an examination of the customer landscape, spanning from innovators to laggards. It sheds light on adoption rates across different regions and key purchase criteria. Understanding price sensitivity drivers empowers companies to tailor their growth strategies effectively.
Market vendors are adopting various strategies to enhance their presence. These strategies include strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches. Some key players in the gifts retailing market include Aldi Stores Ltd., Alibaba Group Holding Ltd., Amazon.com Inc., American Greetings Corp., Bed Bath and Beyond Inc., Card Factory Plc, Costco Wholesale Corp., Enesco LLC, Ferns N Petals Pvt. Ltd., Hallmark Card Inc., House of Fraser Ltd., Loop Commerce Inc., Macys Inc., My Pet Gift Box Ltd, Penney OpCo LLC, Shutterfly Inc., Spencer Gifts LLC, The Walt Disney Co., Walmart Inc., and Williams Sonoma Inc.
Gift Market Segmentation
The gifts retailing market is further dissected by product categories, including souvenirs and novelty items, seasonal decorations, greeting cards, giftware, and other gift items. Souvenirs and novelty items encompass a wide range of products, from clothing and collectibles to artisan handicrafts. Developed countries such as the US, Japan, France, the UK, Germany, and Canada have a mature market for these items due to high demand. Personalized sports equipment and clothing are also gaining traction within this category.
Seasonal decoration gifts encompass items like decor pieces, figurines, ornaments, and household items that gain popularity during holidays. Emerging markets like China, Russia, South Africa, India, Malaysia, and Brazil have witnessed increased consumption of seasonal decorations, driving growth. Wall art decorations, outdoor and garden gifts, and personalized decor are prominent categories within this segment.
Distribution Channel Segmentation
The market share of the offline segment is still significant, despite the rise of online shopping. Offline distribution channels include specialty retail stores, hypermarkets, supermarkets, convenience stores, department stores, and more. Sales through offline channels have continued to grow, driven by extensive marketing efforts and store expansions in various geographic locations.
On the other hand, online distribution channels are experiencing rapid growth due to changing consumer preferences. Increased internet penetration and smartphone usage have fueled online shopping. Manufacturers are partnering with e-retailers to expand their reach, resulting in increased sales. Tier-I and tier-II cities are key target markets for online retailers due to logistics access and convenience.
Europe is expected to contribute significantly to the gifts retailing market, accounting for 40% by 2032. The gifting culture is prevalent in countries like the UK, Germany, France, and Spain. European customers are also conscious of the environmental impact of products, preferring personalized gifts made from recycled materials. This inclination for eco-friendly gifts is boosting demand in the region.
In conclusion, the gifts retailing market is on an upward trajectory, driven by evolving consumer preferences and market dynamics. As it continues to grow and adapt, businesses in this sector must navigate both opportunities and challenges to thrive in this competitive landscape.
- How big is the gift shop industry? The gift shop industry, specifically the gifts retailing market, is estimated to grow at a Compound Annual Growth Rate (CAGR) of 3.01% between 2022 and 2027. The market is forecasted to increase by USD 13,491.69 million. In 2017, the size of the gifts retailing market was valued at USD 76,251 million.
- Is the gifting market growing? Yes, the gifting market is indeed growing. The gifts retailing market is experiencing growth due to several factors, including rising demand for seasonal decorations, a growing gifting culture, and an increase in the sale of gifts, particularly during festive occasions and holidays. This growth is reflected in the projected CAGR of 3.01% between 2022 and 2027, as well as the substantial increase in market size by USD 13,491.69 million during this period.
- How big is the Personalized Gifts market? The article mentions that personalized decorative gifts are popular choices for important occasions, contributing to the overall growth of the gifts retailing market. However, it does not provide specific figures for the size of the personalized gifts market. To obtain precise data on the size of the personalized gifts market, further research and market analysis specific to personalized gifts would be necessary.
- How big is the consumer gifting market? The article provides insights into the gifts retailing market, which encompasses various segments of consumer gifting, including souvenirs and novelty items, seasonal decorations, greeting cards, giftware, and other gift items. It also discusses the gifting culture and the demand for gifts during festive occasions. However, it does not provide specific figures for the overall size of the consumer gifting market. To obtain detailed information on the consumer gifting market, one would need to refer to comprehensive market reports and studies that focus specifically on this aspect of the retail industry.