Personalized Gifts Market Analysis

Personalized Gifts Market (Global, 2024)

Introduction

The 'personalised gifts' market is a growing and dynamic one. It is driven by the ever-increasing demand for personal, meaningful and bespoke products. As individuals seek to express their emotions through the personalisation of items, the market has seen an upsurge in creativity and innovation. It has also seen the use of advanced technology to offer tailor-made solutions. This trend is not only reshaping the gift-giving industry, but it is also strengthening the emotional bonds between givers and recipients. As e-commerce platforms have become more popular, they have made it even easier for consumers to access a diverse range of bespoke gifts. The ease of access has prompted them to seek out and create bespoke gifts that reflect their personal history and relationships. As the market grows, a clear understanding of the preferences of consumers, the emergence of new trends and the competitive situation will be essential for all those who wish to capitalise on the growing demand for bespoke gifts.

PESTLE Analysis

Political

In 2024, the custom-made gifts market is affected by various political factors such as the policies and regulations of the country. For example, the United States has introduced import tariffs, which may affect the cost of materials used in custom-made gifts. In 2023, the average tariff rate for imported consumer goods was about 8.5 percent. The price strategy of custom-made gifts enterprises was also affected. In addition, the local government also actively supports small businesses with subsidies and tax rebates. Among the various states, more than 1,200 policies have been reported to support the development of local artisan industries and custom-made gift companies.

Economic

In 2024, the economy will be characterized by a continued increase in disposable income. In the United States, it will rise by 3.2%, to an average of 45 thousand dollars per household. This rise in income will favor the purchase of personalized gifts, as people are more willing to buy unique and personal items for special occasions. The unemployment rate will remain low, at about 3.6 percent, which will also encourage the confidence of consumers and the purchasing power of the market for personal gifts.

Social

The social trends in 2024 point to a growing preference for a gift that is unique and personal, especially among millennials and Generation Z consumers. A survey conducted in early 2024 showed that 72% of consumers aged 18 to 34 prefer a bespoke gift to a generic one, which shows the emergence of a trend towards individuality and personalisation in gift giving. The rise of social media has also made it easier to share ideas for unique gifts. Over 60% of users on platforms such as Instagram and Pinterest actively seek out gift ideas for themselves.

Technological

In 2024, the custom-made gifts market will be influenced by the advancement of technology. Artificial intelligence (AI) in e-commerce platforms will simplify the custom-made process, allowing consumers to easily create their own gifts. It is expected that by 2024, 45 per cent of the e-commerce platforms in the custom-made gifts industry will use AI tools to improve customer experience and optimize the production process. In addition, the development of 3D printing technology will reduce the production time by 30 per cent, enabling custom-made gifts to be delivered faster.

Legal

Intellectual property and consumer protection laws are the main legal factors affecting the bespoke gifts market in 2024. The number of trademarks for bespoke products increased by 15 per cent in the United States in 2023, indicating a growing concern for brand protection among businesses. The General Data Protection Regulation (GDPR) is another important factor for European companies, as fines of up to 20 million euros or four per cent of turnover for non-compliance can be very high. The importance of data privacy in the personalization process is therefore clear.

Environmental

In 2024, the market for personal gifts is largely influenced by considerations of the environment, and there is a notable trend towards sustainable production. 40 per cent of consumers now prefer products that are eco-friendly, and this has led to a change in the materials and methods used in production. In response to the increased demand for biodegradable packaging, it is estimated that 25 per cent of companies in the gift industry will have adopted sustainable packaging by the end of 2024. In addition, the carbon footprint of the production process is under scrutiny, with the aim of reducing the industry’s emissions of greenhouse gases by 20 per cent by 2025.

Porter's Five Forces

Threat of New Entrants

The market for individualized gifts has medium-to-high entry barriers, including the need for a unique product and a successful marketing strategy. It is possible to start with relatively small initial investments, but building a brand and gaining customer trust is difficult. The growing demand for individualized products may attract new players, which could increase competition.

Bargaining Power of Suppliers

Suppliers of personal gifts generally have little bargaining power, because there are so many sources of raw materials and production. Suppliers of similar products can easily be replaced by competitors. The abundance of choices helps to keep suppliers in check.

Bargaining Power of Buyers

The bargaining power of the consumers in the market for individualized gifts is high. They can easily compare the prices and the offers of various retailers. The Internet increases the availability of information and increases price sensitivity. The demand for unique and individualized products also makes competition among the suppliers intense.

Threat of Substitutes

The threat of substitutes in the market for individualized gifts is moderate. The substitutions are generic gifts or experiences. The individualization of the gift creates a niche that is difficult to imitate. However, with the changing tastes of consumers, substitutes may emerge and thus become a threat.

Competitive Rivalry

The competition in the bespoke gift market is fierce, with a large number of competitors vying for market share. Product uniqueness, quality, price and customer service are the key factors determining success in the market. Competition is further intensified by the low switching costs for consumers, as they can easily change to a competitor offering better value or more innovation.

SWOT Analysis

Strengths

• High emotional value associated with personalized gifts, enhancing customer loyalty.
• Diverse product range catering to various occasions and demographics.
• Growing trend of customization in consumer products, driving demand.

Weaknesses

• Higher production costs due to customization processes.
• Longer lead times for delivery compared to mass-produced gifts.
• Limited scalability for small businesses in the personalized gifts sector.

Opportunities

• Expansion into online marketplaces and e-commerce platforms.
• Collaboration with influencers and social media marketing to reach younger audiences.
• Increasing demand for sustainable and eco-friendly personalized products.

Threats

• Intense competition from both established brands and new entrants.
• Economic downturns affecting discretionary spending on gifts.
• Potential supply chain disruptions impacting product availability.

Summary

Personalised gifts have a strong emotional bond with the recipient. The variety of products available in the market is a major strength. However, challenges such as higher production costs and longer delivery times may hinder growth. Opportunities lie in extending the reach of the e-commerce channel and in tapping into trends such as those relating to sustainability. Threats come from competition and from economic fluctuations. Success will depend on the strategic focus on improving efficiency and using digital marketing tools.