As summer turns to autumn, companies start thinking about their Christmas corporate gifts. But with a recession casting a shadow over budgets, deciding how best to reward clients and staff in a strategic manner during the festive season is more important than ever.
At upmarket department store Harrods, a male grooming kit including cologne, moisturiser and a soft Italian leather bag is the most popular corporate gift purchase. The store says it has seen gifts that communicate values such as heritage and longevity appealing particularly to clients.
Tracy Finn, head of corporate services at Harrods, reveals/ “People are not buying indiscriminately anymore and whether motivating staff or saying thank you to clients at Christmas, you want that gift to have an impact.”
Finn says that using the Harrods name and packaging on Christmas gifts helps communicate a level of permanence that is particularly important in the current climate. She explains: “Clients can emboss logos on leather goods or engraving and use a ribbon with the logo of the company tied around it on a Harrods-branded Christmas hamper.”
Harrods predicts its business customers will still spend on corporate gifts this Christmas because they need to retain and build relationships with their best customers.
Finn says: “During this recessionary time, we are highlighting that there is a big price range available and while people often perceive that Harrods only caters for top end budgets, we are changing that mindset by offering things like a £5.99 tea caddy.”
House of Fraser’s corporate gift offering consists of a range of goods from its core gift voucher and gift card products to hampers, chocolates, gift boxes and festive products.
“A successful corporate gift offering needs to provide choice, quality and value for businesses, as well as being able to adapt to changing markets,” argues Raegan Matthews, House of Fraser’s business incentives manager.
“To maintain a successful corporate gift offer, it’s essential to listen to client feedback as well as building on new relationships through the various marketing channels available such as targeted direct mail, email and one-to-one contact.”
House of Fraser has taken a similar approach as Harrods and made sure that its Christmas gift line this year offers a broad enough range of prices for customers with any level of budget. The retailer believes the entry level products and the cost of the top hamper are the most crucial elements of all those in the portfolio.
Its 2009 selection ranges in price from £20 to £175, to allow for all budgets. “We have had to consider the current recession and the fact that many corporations are spending less this year, but they still want to thank their top clients and reward personnel in tough times,” says Matthews.
This emphasis on low prices in corporate giving is more apparent now than in previous years, but is potentially part of a larger trend that began even before the current economic challenges.
“Of the corporate gifts we receive, their value has been going down year after year,” comments Vincent Potier, managing director at VOIP provider Vonage. “Many companies in the services industry started reducing spend before the recession began.”
Although the budget available for corporate gifts may be reduced for many companies, they are still looking to create an impact. Graham Howarth, director at sourcing company P&MM Source-e, says: “We notice businesses choosing to target a more specific audience with goods that have a high perceived value such as hampers, cases of wine and silver-plated or leather products, rather than the mass giving of lower value items to a wider audience.
“Personalisation of products is now a key requirement and more emphasis is being put on presentation, such as bespoke packaging, which adds to the experience of the recipient and makes the gift more memorable.”
Suppliers marketing experience-style gifts can use the memorable nature of the present to their advantage. Helen Jones, marketing manager at the Society of London Theatre, which runs a Theatre Token scheme, says she has seen more companies asking about active presents instead of the usual bottles of wine, chocolates or hampers.
“They will want the gift to have more impact and show that they’ve given it careful thought. The idea of ‘escapism gifting’ is definitely on the rise,” she argues. “People are keen to ensure that any gift they give during a recession is an enjoyable treat that gives the recipient something to look forward to and a few hours of escape from the daily doom and gloom.”
At the budget end of the scale, Image on Food produces gingerbread novelties in-house for its corporate customers. “Our challenge in the run-up to this festive season was to come up with an economical idea for our corporate clients that would create an impact and put them ahead of their competitors, while not breaking the bank,” comments Vhari Russell, marketing and sales executive at Image on Food.
The company is targeting recession-wary consumers with a message that highlights the low prices of its products and even goes as far as suggesting sharing of the gift between employees of a company for businesses where things are really tight.
Russell explains: “If you normally send several members of the same company a gift, you can cut back but still create an impact with things such as Christmas cookie bouquets.”
While retailers like Harrods are making a virtue of their own brand’s longevity, some companies are also pushing long-lasting gifts. They say items that will stay with the recipient and be used time and time again increase “opportunities to see” and can influence people’s opinions about the brand.
The pen, with its practical, portable and cost-effective credentials, continues to be one of the most popular corporate gifts for Christmas. “With brands demanding ever-greater quality, design, reliability and CSR credentials for their products, pen manufacturers are being spurred on to new heights of innovation,” says Melissa Chevin, marketing manager at promotional pen manufacturer Senator.
She adds: “The perceived value of stylish writing instruments remains high, particularly in the current economic climate when luxury goods are appreciated more than ever before.”
Another brand to claiming that innovation lies behind the success of making corporate gifting successful in 2009 is Hotel Chocolat. The premium chocolatier opened its first high street shop in 2004 and now has 34 outlets. It has branched into gourmet food territory to offer a twist on the traditional Christmas hamper with products like chocolate balsamic vinegar.
Siobhan Brown, head of corporate sales at Hotel Chocolat, says the company aims for “an unusualness and freshness in our product range that stands out from typical corporate gift solution choices”. She also confirms that a wide price range forms part of the company’s strategy for getting clients on board. It is happy to offer corporate clients a small token gift for a few pounds or a “wow factor” hamper or gourmet “tasting table” of chocolates.
It appears that whether in retail, food or promotional items, the suppliers likely to be successful at offering corporate Christmas gifts in 2009 will be those that offer companies a range of prices, develop new products and highlight durability and longevity.
As Hotel Chocolat’s Brown says: “The days of just giving a gift at Christmas have gone. Through its associated brand values, a gift has to be a good workhorse.”
Case study: red letter days/punch taverns
Wouldn’t it be nice if instead of a bottle of sparkling wine, your boss took you on a helicopter ride above the streets of London? Some companies are doing just this. Indeed, experience brand Red Letter Days says it is now recording some of its best sales figures for its corporate gifts division.
“[Experience] has a higher perceived value and can be talked about by people who receive it,” says corporate sales manager for Red Letter Days, Mike Bartlett. “We have increased the range this year and brought in products at a lower value. For example, an F1 simulator experience is £35 as compared with the £1,000 cost of actually driving an F1 car.”
Red Letter Days has also increased the number of tangible products in its portfolio, such as MP3 players and sporting goods. “People don’t have to go bungee jumping or F1 racing,” says Bartlett. “It is mostly about giving a small token that won’t go on paying the gas bill or doing the weekly shop.”
For a client roster that includes Ford, Masterfoods, Vodafone, a raft of high street banks and the public sector, Red Letter Days’ Christmas gift bestsellers include spa days, driving experiences, wines and hampers.
The Christmas gifts are marketed around core propositions – gifts for him, her, couples, families, kids and classic, luxury and unusual presents. Depending on the value of what is being given, a Red Letter Days voucher given in the festive season could translate into a chocolate body wrap treatment, a Krug champagne box or a trip on the Orient Express.
Christmas is also a significant time for service-oriented brands to reward sales achievements and staff loyalty. Punch Taverns works with Red Letter Days on its “Proud to be Punch” scheme, which sees some of its 18,000 employees rewarded with a scratchcard containing prizes including a £25 meal in a Punch Tavern, a £250 Red Letter Days voucher or a £500 holiday voucher.
Because of the increased level of trade in the festive season and staff demonstrating good service around Christmas, the business encourages managers to use the rewards more at this time than other parts of the year.
“We use the scratchcard and associations with brands such as Red Letter Days to retain a level of excitement around the reward,” says Anthony York, head of reward at Punch Taverns. “This scheme helps us to align people with the behaviours that demonstrate the values we want to promote as a company.”