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The science of holiday gifting: unwrapping what really drives our buying behaviors

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This article originally appeared in The Customer

991642 880215a1d84f49f5b5823d9d3a78d0f9mv2The holidays are here, and with them the annual onslaught of gifting guides and special editions of everything from candy to cosmetics. For those of us in the consumer insights and marketing space, this season also inevitably brings a flurry of predictions and debate about how much consumers will spend this year, what they’ll spend on, and what role the broader economy will play in their buying behaviors. Naturally this year, concerns about inflation and recessions dampening buyers’ good cheer abound. But what really explains gift buying behavior?

One recent prediction piece lamented that “success this season is going to come down to the strength of emotional appeals.” On the contrary, I would argue that success every season comes down to emotional appeals, because we buy things (including gifts) to satisfy one of three emotional Need States:

  1. Group Belonging: we gift to cement our good standing with the recipient by impressing them; this is why many of us spring for fancier, higher-status items to give someone else than we would buy for ourselves. The drive to celebrate the season by giving to those we care about is so strong that according to Deloitte’s annual survey, many consumers still plan significant spending this year even as more than one third of households say their finances are worse off than last year.

  2. Discovery: we gift to convey: “I ‘get’ you, and I took the time to find something I know you’ll like.” These presents are thoughtful and personalized. Pinterest is tapping into Discovery gifting this season with their “Gift like you get them” campaign, encouraging the various forms of “bad” (read: thoughtless) gift giver to do better by checking out what recipients have pinned on the platform for ideas.

  3. Release / Rebellion: we gift to break the tension. These are your gag gifts. Whimsical, perhaps frivolous items that say, “I want you to let loose and have fun.” (This was certainly my motivation when I gifted my father-in-law a set of officially licensed moose mugs à la “National Lampoon’s Christmas Vacation” a few years ago).

Conveniently, these same emotional Need States also explain our behaviors around key gifting occasions (read: the Christmas / Hanukkah / Kwanzaa season):

  1. Group Belonging: we look forward to, cherish, and celebrate social bonding and reconnection throughout the holiday season. Participating in these rituals reaffirms our shared cultural values. The buildup to all this Belonging starts all the way back in early fall, with the emergence of “pumpkin spice season” signaling that it’s time for our collective shift from the carefree, unstructured summer season into holiday mode.

  2. Discovery: we also seek out ways to make the season our own, such as starting new traditions for our families, looking for new experiences to celebrate the season, or finding that recipe no one’s tried yet to make us stand out at the office cookie swap. As we at Alpha-Diver have written about before, we’re collectively entering a Discovery cycle, and seeking out new experiences is part and parcel of this self-exploration. Many analyses of the season’s spending are already noting that experiences (concert tickets, dining out, etc.) will trump “things” for a solid portion of the population—including the desirable Gen Z target—as they seek to make up for the lost time of the last two holiday seasons marred by COVID.

  3. Release / Rebellion: amidst all this conformity and togetherness, we need to cut loose a little bit: enter “Friendsgiving,” “ugly sweater parties” and Cousin Eddie memes. The season is festive, for sure, but it is also notoriously stressful and difficult. For many of us, the holiday cheer comes with a side of guilt and pressure around all the things we “should” be doing and the ways we “should” be feeling. PepsiCo cleverly tapped into the push-pull of wanting to celebrate and wanting to scream with its Anna Kendrick “Favorite Things” campaign a few years back, parodying many staples of the holiday season (including ugly sweaters and gingerbread houses) by infusing them with their Frito-Lay snacking portfolio. This was a wise move on several levels from PepsiCo, considering rival Coca-Cola indisputably owns the Group Belonging angle on Christmas, having seamlessly coopted the cultural iconography of Santa Claus into its advertising for nearly a century now.

So how to ensure your brand can thrive not just this season, but every holiday season? Understand what Need State you are uniquely positioned to serve, and which consumer target is most likely to be seeking that emotional payoff. Let that insight guide your activation strategy. Or take a page from PepsiCo’s playbook: consider your competition and what need state(s) they already “own.” Then go after one of the other ones. Even as the overarching theme of the season is belonging and social bonding, all three emotional needs exist every year for different parts of the market, and “all boats can rise” if brands think strategically about what role they are best suited to play in consumers’ emotional journey through the season.