Experience gifts on rise as business booms for RedBalloon

Home grown experience gift retailer RedBalloon hits 72 percent year-on-year revenue growth in the lead up to Christmas this year as major retailers are reportedly placed under strain due to the rise in interest rates, energy prices and the strong performance of the Australian dollar.

This level of growth is unusual for a retailer that has been in business for nearly a decade. CEO and founder Naomi Simson attributes the performance to the increasing popularity of experience gifts as opposed to ‘stuff’. According to data from Experian Hitwise [1] RedBalloonincreased its market share of visits by 25 percent increase in the Flowers and Gifts - Shopping and Classifieds category, from November 2009 to November 2010.

“When we started out in 2001 on second hand computers in the spare room at my house and we created the experience gifting market in Australia, there was nothing like it. Since then we have seen a surge in people purchasing experience gifts – to date we have sold 909, 600 experiences and counting, which is no small feat” says Simson.

RedBalloon’s Customer Experience Team has experienced a spike in calls and emails this year compared to last, receiving 7,386 calls in November 2010 compared to 5,442 November 2009 and 2,128 emails in November 2010 compared to 1,782 November 2009.

Simson says “People are looking at the crowded storage space in their homes and realising they have too much stuff, they don’t want any more clutter. The overwhelming trend that we observe at RedBalloon is people’s yearning for connectedness and community.”

“The initial thrill of a possession wears off, but the stories and the memories that people share with one another after going on an experience create folklore between close friends and family for years to come.”

RedBalloon’s growth is also supported by the convenience of the internet being accessible 24 hours, 7 days a week. Visits at night are growing 54 percent faster than visits in the day time, showing a trend of people shopping online at home. Year on year growth in visits before 7pm are at 39 percent compared to 60 percent after 7pm. The Customer Experience Team at RedBalloon will be working extended hours on Saturdays up until Christmas Eve to meet the needs of customers.

RedBalloon also realise they need to be where their customers are and ventured offline into bricks and mortar by expanding into retail stores around Australia including BIGW, Target, Myer and Dymocks earlier this year.

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