Whether holiday shopping is done online or in a store, the race is on this month to find and purchase the perfect gift for family, friends and co-workers.
But maybe there’s no need to race at all. Experiences, researchers from Washington University in St. Louis and Cornell University say, lead to more happiness than traditional material gifts.
Gift-giving, it seems, comes down to how well you know your recipients.
But it’s insecurity that leads consumers to, year after year, give “stuff” as opposed to experiences. In a series of six studies conducted by Joseph Goodman, PhD, associate professor of marketing at Olin Business School, and Sarah Lim, doctoral student at Cornell University, researchers found that consumers tend to underestimate the experiential gift-giving advantage because they’re afraid they don’t know a person well enough to choose a more personal, preference-driven option.
“Experiential gifts tend to be more unique and less comparable to material gifts,” Goodman said. “Consumers prefer to give experiential gifts when they feel socially close to recipients and when they have the appropriate knowledge about the recipient’s preferences.
“Thus, despite the advantage of giving experiences, consumers often give material gifts in order to avoid giving poorly matched gifts to socially distant recipients, leading to less happy consumers in the end.”
When it comes down to the maximum happiness factor, giving experiences is the way to go, but this option is mostly reserved for people the consumer knows the best.
“Gift givers must know what their recipients like and dislike, and that may require a large social investment,” Goodman said. “If the giver does not have such information, he or she may try to avoid social risks in giving the wrong or inappropriate experiential gift.”