How can I measure the Gift Registry Return-on-Investment?
One of the questions forward thinking retailers ponder is – what creative marketing activity can I undertake at a reasonable cost, to maximize my business revenue while generating a respectable return-on investment?
Clearly, today’s retail climate demands that astute retailers discover new ways to increase revenue, draw new customers to their stores and keep them coming back. Gift Registry has proven time-and-again to do just that! Unlike many retail automation projects Gift Registry does not profess to save money rather the Gift Registry value-proposition is about making money.
Gift Registry was first implemented by Department Stores reaching out to engaged couples. The earliest gift registry programs utilized labor intensive paper based systems and catered exclusively to weddings. At first, the only products typically registered for were fine china, crystal stemware and sometimes silverware. More often than not, these products were not stocked in quantity by the Department Stores and registries enabled them to special order pre-sold known quantities of merchandise.
In recent years, gift registry has grown well beyond Department Stores and their Wedding Registries. Today, independent specialty, lifestyle and gift retailers are finding that traditional registries and “wish lists” can definitely help smaller businesses compete more effectively in-store and on the web. Gift registry helps to build customer loyalty and makes shopping easier.
The tangible benefits for the retailer are that the Gift Registry drives revenue, brings in new customers, and minimizes returns. The intangible benefits are that Gift Registry builds long-term customer relationships, generates incremental sales as unrelated purchases are made when gift buyers shop and the Gift Registry facilitates database driven personalized marketing campaigns.
Customers who register their selections at their favorite store benefit from the satisfaction of receiving what they want and need. It also eliminates the unpleasant and inconvenient task of returning unwanted items to the store for a refund or exchange, not to mention disappointing the gift giver for making the wrong selection.
Finally, the customer who is shopping for gifts gains satisfaction by selecting gifts that they know the recipient really wants. The result is a satisfied customer who can’t wait to present their gift in full confidence knowing that it will be appreciated.
Automated gift-registry systems can range from a clerk-assisted application installed on a single PC – to a global enterprise, multilingual deployment; combining in-store full-service and self-service application modules plus tightly integrated web-based item selection and transactional functionality offering an omni-channel experience. System architecture and features will vary dependent upon the functionality and level of service to be offered.
Small to mid-size retailers typically do not have the resources to build their own applications in-house and therefore should rely upon Gift Registry specialists who will be able to provide a high quality turn-key solution at a reasonable cost. Larger retailers who may have the capability to build their own systems more often than not choose to reduce risk, lower costs and expedite deployment by purchasing well known and proven systems.
The return-on-investment for a Gift Registry implementation will be a function of management and marketing support in addition to a wide variety of retailer specific variable factors.
Consideration must be given to:
- The number of registries per-store – per-year
- Average number of items per registry
- Average Item retail
- Average item margin
- Average percentage of registry sell-through
- Software cost
- Hardware cost
- Web hosting costs (if applicable)
Reputable Gift Registry software vendors can help retailers calculate a ROI based on their particular situation.
Marketing a Gift Registry should be an integral part of an integrated marketing campaign – not an add-on or afterthought. In-store signage, links from the company web-site, inclusion in advertising campaigns and public relations efforts are all mandatory for success. Marketing support can include a welcome package for registrants that include checklists suggesting item categories to include in a registry. Some retailers provide tastefully printed cards that registrants can provide to guests stating that: “Our gift preferences have been registered with your store.” Others keep customers coming back with post-event targeted marketing campaigns for “registry completion.”
Marcole Gift Registry Team