Special occasions can evoke a mild sense of panic for many gift givers who struggle with what to buy. Another trinket for grandma on her birthday or sweater for the husband on Christmas seems so been there, done that. Wharton marketing professor Cassie Mogilner has a better idea. Her research finds that while people enjoy receiving material things, such as an expensive watch or a scented candle, they really seem to relish gifts that give them an experience. Mogilner, who recently discussed the paper, “Experiential Gifts Are More Socially Connecting than Material Gifts,” on the Knowledge at Wharton show on Wharton Business Radio on SiriusXM Channel 111, finds that experiential gifts resonate at a deeper level, forging a stronger emotional connection between the giver and recipient. The paper was co-authored with Cindy Chan, a professor at the Rotman School of Management at the University of Toronto Scarborough.
Concert tickets for the music fan in your life, or a gift certificate to a French restaurant for the Francophile in your office can have an impact even long after the experience is consumed, the researchers find. So go ahead and think outside of the ribbon-wrapped box — Mogilner thinks the payoff could be priceless.
An edited transcript of the conversation appears below.
Give the People What They Want
In my research, I’m interested in happiness and what types of purchases and things one can do to increase happiness. There’s been a growing body of work that suggests that from a happiness perspective, a good way to spend your money is buying experiences rather than material goods. Research finds that people are much happier, and that happiness is lasting, when treating themselves to a nice dinner or going on vacation or going to a concert, rather than buying the latest electronic or a piece of jewelry. That is something for everyone to keep in mind when they’re purchasing for themselves.
But we were interested in the effect of purchasing these experiences or material gifts for other people. From a gift-giving perspective, what are the optimal types of gifts to give? A lot of the work has looked at the extent to which people like gifts, but we were thinking that perhaps a bigger motivator in buying gifts is fostering that relationship between the giver and the recipient. So, we explore this question: What types of gifts are better at fostering relationships? We ran a bunch of studies and found that when recipients receive an experience, regardless of whether they share in that experience with the gift-giver, they feel more connected to the gift giver as a result of it, compared to receiving a material gift.
Even sort of extending outside of personal relationships within the family and friends, you can think about experiential gifts for colleagues. For instance, buying them a gift certificate for a restaurant or movie tickets as opposed to whatever little knickknacks people tend to give their colleagues. You see this positive connecting effect across relationship types.
“When recipients receive an experience, regardless of whether they share in that experience with the gift-giver, they feel more connected to the gift-giver as a result of it, compared to receiving a material gift.”
We see that in people who have received an experiential gift versus material gift, there’s actually no difference in liking. People like material gifts just as well as experiential gifts. They also view experiential gifts as no more thoughtful. But the thing that seems to be driving the effect is the emotion that gets evoked when you’re consuming the gift. It’s beyond the emotion you feel during the gift exchange, like when you open the present. It’s really the emotion that gets evoked when you’re attending the concert, when you’re eating the dinner, versus when you’re wearing the sweater or the Apple Watch. It’s a range of emotions that you can evoke if you get someone tickets to an opera. It might not be laughing and joyous the whole time, there might be some tears shed, but the level of emotion — emotions are very connecting in general. It’s interesting in this case because you don’t necessarily need to be sharing in the experience with the gift giver to have this connecting effect. Merely feeling the emotion, and within the psychological context of the relationship, because someone had given you this gift, you’re thinking of them as you’re consuming it. Those emotions lead to greater feelings of connection.
The $10 Challenge
Certainly, in gift giving you want to think about the recipient as you’re picking out what that experience is going to be or that material good. It’s not my research, but some funny little tidbits to keep in mind is that gift recipients don’t appreciate thoughtfulness as much as the gift giver thinks they will. For instance, when there is an opportunity to buy off a gift registry, oftentimes gift givers are like, “I’m going to be super thoughtful and I’m going to come up with my own gift that I’m going to give them.” But recipients like presents off their registry better. They don’t give as much value to the thought that went into the gift in terms of how much they like the gift. So if your goal is to make the recipient like the gift, you might want to try being a little less thoughtful and just give them what they ask for.
We conducted a study in which undergrads, as our participants, come in with a friend. We assigned one person to be the gift recipient and one person to be the gift giver. Among the gift givers, we gave them $10 and told them, ‘Go out and buy a gift with this money for your friend here.’ We told them either to buy an experiential gift or a material gift. The gift recipient wasn’t aware of our instructions, they just 10 days later received this gift that their friend had given them. You can’t buy a ton with $10, but you saw some examples of the experiential gifts that people gave. They bought them a ticket to the local movie theater or a Chipotle gift certificate versus material gifts like a pint glass, a teddy bear, socks. And we found that the gift recipients who received the experiential gift felt more connected to the gift giver. Again, I will point out that they didn’t like the gifts any more, but they did feel more connected. Our argument is that a big goal of gift giving is not just to give a liked gift, but to foster relationships.
“One of the reasons that buying experiences is better is because you always have that memory to return back to, whereas people adapt to things really quickly. It sort of sits on your shelf and you engage with it every day, and so it loses its shiny, bright newness. Whereas a memory, every time you refer back to it, is just as shiny and bright.”
But even now, people are more likely to give material gifts. When we surveyed a bunch of folks asking them the last gift they gave, something like 85% gave material gifts. People tend to give material gifts. And oftentimes it feels appropriate, particularly if you’re showing up at an event. You don’t want to show up empty-handed or with an envelope; you want to have something. But despite that tendency, we see this connecting effect of experiences. Bringing up the role of generation, there’s a lot of talk right now about how [millennials] share these life narratives that they’re telling through their experiences, and they’re posting these really cool experiences on Facebook. So, there’s more awareness of the value of experiences, and maybe gift givers might be a little more likely to give experiences. But again, even though the tendency is to give material gifts, our research suggests that you shouldn’t.
One of the reasons that buying experiences is better is because you always have that memory to return back to, whereas people adapt to things really quickly. It sort of sits on your shelf and you engage with it every day, and so it loses its shiny, bright newness. Whereas a memory, every time you refer back to it, is just as shiny and bright. That’s why people adapt less quickly to experiences than to material goods.
Don’t Buy Dad Another Tie
There are gift-giving occasions throughout the year. We ran studies both on Father’s Day and Mother’s Day, finding that when people are recalling gifts in some of our studies, you see it across occasions. Birthdays. Weddings. For instance, my co-author on this project, Cindy Chan, recently got married, and I am responsible for buying her a wedding present. Of course, because of our research, what I am going to be giving her is contributing to her honeymoon as opposed to buying a piece of china. There’s some really neat websites now for gift registries that are opportunity gifts, experiential gifts, and they are picking up on that.
Something I’ll also point out is that people tend to give material gifts and often feel more comfortable arriving at an event with something in hand. You also see the beneficial connecting effect of simply highlighting the experiential aspects of a material gift. We ran one study where we had gift givers give a coffee mug. On the mug was printed either “Coffee Mug”, highlighting the material aspects, or “Coffee Time”, which was sort of looking to evoke that experience of drinking the coffee. And we saw the effect there.
“People like material gifts just as well as experiential gifts. They also view experiential gifts as no more thoughtful. But the thing that seems to be driving the effect is the emotion that gets evoked when you’re consuming the gift.”
You can highlight the experiential aspects of a gift. I gave my husband a watch, which was a material gift, for our anniversary, and I was like, “Oh my God, I am totally going against my research.” But I wrote this long letter about how it is looking to evoke the time that we have spent together and that when he is wearing it. I am hoping that it sort of signals and reminds him of our time and our relationship, and the experiential aspects of that watch. So, if you’re set on giving a sweater, you can highlight, “I’m giving this to you because it will make you feel cozy and warm when you’re walking in the winter days.” It’s highlighting the experience of consuming it, as opposed to the fact that it’s a sweater that you have and are putting on your shelf.
We ran a study among university students and their dads around Father’s Day. We reached out to the dads before Father’s Day asked them how connected they felt to their kid. Then we touched base with them after Father’s Day and asked them how connected they felt to the kid. We asked the university student what they gave their dad for Father’s Day. And we saw that those dads who got the more experiential gifts — going out to brunch or a beer tasting as opposed to the tie or whatever it is that people tend to think of when giving Father’s Day gift — did feel more connected to their sons and daughters after Father’s Day.
There are so many people to give to, and so it’s very easy to log into Amazon and do all of your gift shopping there. But I would encourage people to just as easily think about maybe logging onto some website or sending movie tickets, or giving everyone a gift certificate to a restaurant in their city. You don’t have to leave your home to do your gift shopping to buy experiences as you do material gifts.