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Gifting specialists are targeting millennials to challenge major retailers, says GlobalData

January 25, 2018 Statistics & Trends No Comments Email Email

New gifting market entrants are stealing share from general merchandisers in stationery and homewares – general merchandisers’ share of the homewares market is forecast to fall 0.4 percentage points from 2017 to 2022. While longstanding retailers should stock on-trend products, it will not be enough to prevent loss of sales, according to GlobalData, a leading data and analytics company.

General merchandisers such as Ryman and The Range generally stock a similar stationery offer each year, but retailers, for example Typo and kikki.K, are disrupting the market by investing in product innovation and social media, thus helping them to capture spend, especially among millennials.

GlobalData’s report: ‘Home Décor and Accessories 2017’ found that 44.3% of shoppers used social media to gather homeware inspiration, so retailers executing their social channels well are particularly successful at driving gifting sales.

Sarah Johns, Retail Analyst at GlobalData, comments: “This is due to the fact that gifting specialists are quick to react to consumer trends and can use social media effectively to communicate desirable brands millennials want to associate themselves with.

“To reduce the threat of gifting specialists stealing market share, retailers need to identify new trends early on by following social media influencers and previous themes, be quick to adapt and change their product offer as fads come and go, and improve their appeal among young shoppers via channels with which they regularly interact such as Instagram and Snapchat.”

Retailers such as TK Maxx should take inspiration from best-in-class social retailers such as Primark and Skinnydip who maintain a steady stream of shoppable content via Instagram ‘stories’. For example, you can now ‘swipe up’ on an Instagram story to buy products that are featured. Retailers should also seek to create an exciting in-store experience with events, celebrity collaborations, and in-store digital media; just as the specialists are doing. This will generate footfall from younger consumers who increasingly value experiential retail.

With flamingo-print cushions, cactus-shaped mugs and unicorn pens, new gifting retailer Neon Sheep is one of the latest entrants to the gifting market – it recently opened its third UK-based store in Lakeside, Essex and plans to open up to 12 more stores across the country by the end of 2018. While the retailer has work to do establishing brand awareness, its continued on-trend range innovation means that it is in a strong position to grow market share.

Johns continues: “Neon Sheep joins a wide range of other gifting specialists, from the established players such as Oliver Bonas and Paperchase, to the new entrants such as Typo, kikki.K and Skinnydip which have helped create the niche novelty segment, driving collective growth of the retail sub-category.”

General merchandisers such as WH Smith and Ryman as well as grocers and department stores are most under threat from these new gifting entrants. Although market share loss has only been minor so far, GlobalData anticipates specialists’ sales growth to take directly from these players, as well as driving growth in the homeware, stationery and gifting markets themselves.

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