How will consumers be buying gifts in 2025?
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As the dust settles on the biggest gifting season of 2024, it’s a good time to examine the consumer behaviours that will continue to influence gift buying in the coming 12 months.
How will the way we find and buy gifts change? Where are the opportunities for brands and retailers?
Social Commerce
The influence of social media platforms on gifting has been growing year-on-year and this will continue into 2025.
Social media feeds are simultaneously inspiring gift lists and wants among consumers and giving them the opportunity to discover and shop gifts for others. Much of the influential power of social media lies in the fact that the products consumers are seeing are wrapped up in content rather than being static adverts.
In a 2024 survey by MGH, 55% of consumers said they had discovered holiday gift ideas while scrolling on TikTok. 39% said they purposefully searched for holiday gift ideas on the platform.
Vitally, these consumers aren’t just being inspired by social media content but are also making purchases directly from platforms. 37% of respondents in MGH’s survey said they had purchased items for others on the TikTok Shop.
It’s perhaps unsurprising that younger generations are more likely to buy gifts through social media. Gen Z was more than twice (42%) as likely to buy holiday gifts directly through social media in 2024, according to research from Basis Technologies and GWI.
Across all generations, the most popular social media platforms for buying gifts were Instagram (57%), Facebook (56%) and TikTok (43%).
Retailers should be looking at their omnichannel strategy and ensuring that their social media channels are connected to their buying channels. It’s clear that consumers are willing to purchase at the point of inspiration, so retailers need to make it as easy as possible for them to do that.
Second-hand Gifting
While second-hand shopping has become increasingly accepted – and even preferred – by consumers in recent years, preloved has struggled to make as much of an impact on gifting. A lot of this is down to the perception that second-hand gifts are less meaningful and the desire not to be seen as ‘cheap’.
However, these outdated views are slowly being shed. The 2024 Recommerce Report from Vinted and Retail Economics found that 63% of UK shoppers are comfortable receiving second-hand gifts. 84% said they were likely to spend at least part of their Christmas budget on second-hand gifts.
Research by YouGov found that 43% of UK shoppers would look to buy pre-loved goods as gifts at Christmas. 34% of people also said that they think it’s more socially acceptable to buy pre-loved presents.
What’s perhaps unexpected is that 64% of European Gen Z shoppers (aged 18 to 24) think that pre-loved items make the most thoughtful, original or romantic presents, according to a survey by OnePoll for Amazon.
Changing perceptions of quality may have a part to play in the growth of second-hand gifting. In a new report from resale marketplace OfferUp, 51% of US consumers said they agreed that “second-hand items are typically higher quality than newly produced items sold at retailers today.”
We also can’t ignore the impact that the ongoing cost of living is playing in the growth of second-hand gifts. Consumers don’t want to give up celebrating special occasions and holidays in the way they’re used to, which means buying preloved items can help budgets go further.
Retailers who have developed resale platforms for their products may benefit from this trend. Being able to buy second-hand directly from a brand could give consumers more confidence in their purchases, from both an authenticity and quality perspective.
AI-Powered Gift Recommendations
Consumers want to buy gifts that will be well received by the recipients and add value to their lives. For some though, the quest to find the perfect present can be paralysing – whether that’s knowing where to start or feeling overwhelmed with options.
Retailers are starting to address this by using AI to help consumers get personalised gift recommendations. AI-powered chatbots allow shoppers to search for presents in a more conversational way than traditional online searches. This includes the ability to provide context for the purchase, information on the recipient and their preferences, feedback on recommendations, and ask questions about features.
It’s the sort of human and sales assistant relationship that consumers value in-store but applied to the world of e-commerce. In a study of US and UK consumers by Coveo, 31% of shoppers said they would find an advisory experience powered by GenAI useful for online gift shopping.
Accenture’s latest Annual Holiday Shopping Survey found that 93% of consumers agree that AI could help them find better gifts. 79% said that they wish they could identify the available options that suit their needs more quickly and easily.
Major name retailers are all embracing generative AI’s capabilities when it comes to gift recommendations, with the likes of Target, Walmart, Amazon and Etsy creating their own tools. One benefit of this is that gift recommendation tools can drive traffic to retailer websites at a time when consumers are primed to buy. This can lead to easy conversions.
However, there is a risk that AI-powered recommendations for gifts can fall into the trap of being overly generic. These tools need to be careful to not make suggestions that are based on bias and lazy segmentation.
Retailers looking to introduce these sorts of AI tools need to be focusing on their product and customer data to make sure that recommendations are as useful and sensible as possible. They should also use them as an opportunity to understand the type of gifts and recipients that consumers are looking for and use this data to inform their gifting strategy.
Avoiding ‘Tat’
There is ongoing strong consumer sentiment towards gifts that aren’t ‘tat’ or low quality.
There are several aspects to this trend. For some, no tat means a move away from plastic and buying products made of more sustainable materials. For others, it means buying better quality items so that they last for longer before they enter waste streams.
But not buying tat can also simply mean thinking more about purchases and not buying for the sake of it. A gift that isn’t tat is one that the recipient will truly want, enjoy and keep.
A dislike of junk may also be one factor behind the trend towards self-gifting.
In Deloitte’s Holiday Retail Survey 2023 of US consumers, the top reasons for self-gifting were finding a gift that was practical/useful (51%), satisfies one’s own passions or hobbies (42%), offers moments of relaxation (39%), or has long-lasting use (33%).
By comparison, tat and novelty gifts tick none of these boxes.
At peak gift giving times, such as Christmas, shoppers turn to social media and online forums to ask for help finding items that aren’t tat but fulfil certain criteria, such as size, price, or suitability for someone you don’t know well. This suggests there is a huge opportunity for brands and retailers – of all sizes – to do more to help consumers find and buy better gifts.
One way is to stop sourcing low quality, novelty items that only fulfil the purpose of being something to open before quickly being discarded. Retailers also need to move away from presenting items like soap and candles as a generic one-size-fits-all option. These products can be as thoughtful and individually tailored as any other – if they’re marketed that way.