Precious moments as a gift: European gift box market in great shape

Article published on Feb. 12, 2018
Article published on Feb. 12, 2018

This article has not been vetted by an editor at Paris HQ

It’s one of the rising markets in Europe and almost a showcase for market innovation. In barely a decade, the gift box market has matured from an unstable niche market to an unavoidable segment in tourism and recreation. Behind the flagships : a solid strategy, constant innovation and careful management choices.

The whole idea was a stroke of genius or madness. Offering something immaterial - offering a box with nothing inside. Offering a stay somewhere. Where? No idea - you choose. If anything, there was actually a risk that the entire concept could have been tossed out by the market as being dismissive and almost condescending : not knowing what to buy, the customer bought an open-ended gift, leaving the receiver to do with it what they wished - a concept close to gift vouchers. Instead, the opposite happened : the market responded and found value. By offering a gift box, clients felt sure the end product, whatever it may be, would be satisfactory. It alleviated the chore and stress of choosing a gift, while remaining precious in the eye of the receiver.

But for that to happen, a lot had to be done in terms of market research, and customer psychology - and a lot was. Did these immaterial gifts need to be sold as physical boxes? Companies who chose otherwise (plain online booking) struggled to develop sales, while others recycled the psychological value of physical gifts, which was studied by Professor Daniel Howard: “The study subjects' positive moods were supported by finding parallel effects of gift wrapping on mood and attitude and by finding greater effects of happy mood strengthened the subjects' attitude towards the gift. These results are consistent with the premise that the happier one's mood, the more that one seeks to maintain that state of mind by developing of favorable attitudes toward owning the gift received.”

At first glance, the entire business concept could seem feeble: between a customer and a service provider, the middleman is always the first to be cut out, if he doesn’t provide sufficiently palpable added value. Perhaps the temptation from the client to deal directly with the provider is what proved fatal to many companies during the market’s consolidation. Between 2000 and 2010, companies flourished all over the nascent market before dropping like flies. At the stem of their demise: insufficient command of quality levels and unreliable cash levels. Just in 2009, strings of companies were going bankrupt, as reported by Hayat Gazzane: “MagicDay is undergoing grave difficulties. Just as Stellaris is, whose website has “temporarily” interrupted sales, and Vertigobox which has just closed.”

Now that the market is in shape, companies such as Wonderbox, market leader in Europe, are seeing consistent and increasing revenue along with their development strategies. Julie le Bolzer, Les Echos’ reporter, writes: “Globally, playing the long game has benefitted Wonderbox. The company which employs 400 people makes over 40% of its 220-million-euro turnover abroad.  Beyond the organic growth, the company has launched in external acquisitions.” Last June, Wonderbox bought Dutch competitor GiftForYou, having acquired shortly before Belgian competitor Vivabox. 

This preliminary market phase means two things today: the first is that companies which survived the first decade had the necessary discipline to forge resilient business processes despite booming business making it seem easy - before getting wiped out by the first market shifts. The second is that, now that the natural selection has been operated, the European gift box market is composed of companies which are battle-proven.

Wonderbox, for instance, built a reputation on the market for being a guarantee for quality, even in the shaky beginnings of the market, when it was tempting for all players on the market to grab easy money and pay little attention to the quality of the experience they sold. Wonderbox CEO Fabrice Lepine details we have set up a “dream-testing” program, where a mystery client is sent to try out a stay, and check whether the service is provided in agreement with the terms of the contract.” In addition, clients have the guarantee that they will not be dealing with two suppliers, but one. Wonderbox guarantees its stays, as being the last business to have sold it, and refuses to deflect customer reclamations towards the end provider. Slowly, as the market giants emerged, they were able to draw the standards of the new industry. CEO founder Bertile Burel places her own set of values at the core of any success on the gift box market : “innovation, self-realization, and quality”.

If the gift box market gives any lessons to be learned on a nascent market, it is that forging a new brand is nothing easy. Successful brands have managed to produce a wide array of offers, constantly improved, while convincing their client that a few extra pounds would been well spent in a gift box, rather than dealing directly with the provider. The European gift box market has found a delicate balance between promising its clients a refreshing adventure and making them feel safe in their eventual choice.