During the busy holiday shopping season, retail businesses become fiercely competitive They go all out to offer sales and promotions that will drive consumers to their stores and websites. According to Forbes, as of late December 2016, holiday sales were expected to reach the $1 trillion mark, with the average household shelling out more than $400 on holiday-related items.
That’s a lot of money on the table, so it’s no wonder retailers are seeking ways of vying for a piece of the holiday shopping pie. Many businesses offer sales and a slew of other promotions in the weeks and even months leading up to winter holidays, often culminating in Black Friday and Cyber Monday extravaganzas of savings designed to draw out shoppers during the long Thanksgiving weekend.
One strategy that more businesses have chosen to employ is offering free holiday gift wrapping, a practice designed to provide consumers with a high level of service and convenience during this hectic season. Gift wrapping was a practice once employed by major department stores that could shoulder the expense, has now infiltrated into small boutiques and online operations. Offering holiday gift-wrapping is it a great way to gain the edge on competitors, or is a waste of resources you can ill afford?
Money to Be Made
In 2011, Hallmark estimated that the gift-wrapping industry generated roughly $3.2 billion in retail sales, with consumers snapping up wrapping paper, ribbons, gift bags and boxes, and more for the purpose of wrapping presents. Not surprisingly, however, many shoppers would prefer to save time and money by having a professional wrap their gifts for them in-store.
In fact, customers that save money by wrapping are likely to spend more on in-store purchases as a result. Retailers that offer wrapping for free could see as much as a 50% profit margin per item, as well as increase sales and profits. Would you rather see consumers with money to spend head to the nearest Hallmark to purchase gift-wrapping supplies, or purchase more in your store?
The bottom line is always important, and even though you could significantly boost earnings by offering gift-wrapping, there’s also going to be a cost. How much will depend on what you offer. Wrapping paper, ribbon, bows, bags, and boxes will all set you back, perhaps as little as less than a dollar per gift, or perhaps as much as two dollars or more, depending on materials and size.
This doesn’t begin to address what you’ll spend on labor, with dedicated employees wrapping gifts for shoppers. You can temper costs by setting limitations, such as a certain number of gifts per shopper, or a minimum spend to qualify for free wrapping services. You’re going to need to estimate costs versus potential earnings, however, to determine if the profit margin actually makes offering this service worth your while.
Training employees is also important. As the cost of paper, tape, and ribbon can quickly add up, preventing waste is a smart strategy. If employees can wrap swiftly and correctly on the first attempt, you save money on materials and are able to service customers more efficiently, as well. This creates a more satisfying shopping experience—one where the customer will likely return.
If you are a customer or a soon to be customer of Specialty Store Services and would like more information on Gift Wrapping Supplies for your store, shop our website, Specialty Store Services, for all your retail store needs. If you have a question that you would like answered immediately, you can Live Chat, or phone us at 800-999-0771.