New DTC toolkit   //   May 30, 2024

As more brands build out corporate gifting programs, new B-to-B solutions are emerging

Corporate gifting has grown to be a lucrative business for many brands, with the industry expected to hit $306 billion by the end of 2024, according to Coresight Research.

E-commerce brands know these bulk orders can be an important part of a diverse revenue stream. In the past few years, direct-to-consumer brands like Homesick and Bombas have focused on building out their corporate gifting businesses. However, managing corporate orders can be tedious and time-consuming for the brand, especially if there are further friction points like contact forms and gift customization. And, for the most part, DTC brands have to manually place these large orders unless they work with gifting marketplaces.

More startups are building out corporate gifting programs because they see it as an important way to get in front of new customers, and diversify beyond other digital customer acquisition strategies like Google and Meta ads. And now, more business-to-business providers are emerging to help brands tackle this new sales arm. Earlier this month Zest, originally launched in 2022, debuted a white-label corporate gifting storefront for online brands to help ease this transaction type. The company powers a dedicated corporate gifting portal on the brands’ website, with the ability to integrate with Shopify. Zest currently works with a little over 50 companies, including buzzy brands like Milk Bar, Graza, Brightland and Levain Bakery. The company does not consider other corporate gifting marketplaces that work with DTC brands as direct competitors, like Postal and Impact Dimensions.

A lucrative customer acquisition opportunity

Startup brands still in the early growth stage are increasingly investing in offering corporate gifting. Felipe Araujo, chief digital officer at Cariuma, said the DTC shoe brand began its corporate gifting program about a year and a half ago “because of an opportunity we saw in the market.”

The company has been able to leverage sales through direct outreach from past customers looking to do bulk orders for their workplaces. “It’s a small part of the overall business, but we think it’s an important strategy to get in front of new customers in different sectors and demographics, outside our normal reach,” Araujo said.

“The biggest challenge is that every single order is different when it comes to corporate gifting,” Araujo explained. As in, there is no one-size-fits-all solution and there is no way to automate given the variety of ways to service each client. “Shopify’s front end works wonderfully when it’s a person purchasing one or two pairs of shoes,” he said. “But the platform is not set up to fulfill and create these kinds of big orders of 30-plus pairs.”

Cariuma has yet to test any automation solutions, said Araujo, but the company has seen that working through corporate gifting vendors has made for a more structured process thus far. Cariuma is also considering investing in e-commerce solutions to optimize this part of the e-commerce operation.

Now, newly launched brands are getting the ball rolling on the corporate gifting business early on. Luxury candle brand Caftari, which launched last November, generates 25% of its current sales from corporate gift orders. Founder Shreya Aggarwal said that’s largely due to focusing on B-to-B partnerships instead of direct-to-consumer marketing in the company’s first year. Current wholesale partners include hospitality and resort groups, like the Four Seasons and Equinox clubs. 

“We actually launched corporate gifting before launching the DTC brand because we’d already had an order in place,” said Aggarwal, who has been reaching out to pitch corporate clients on gifting Caftari’s $125 candle set. Aggarwal said the brand is currently in talks with Selling Sunset’s Oppenheim realtor group for a corporate gifting partnership. “The prices are wholesale, so it does cut into the margins but the volume makes up for it,” she said. 

All of the outbound pitches also help Caftari reach its target audience: high-net-worth individuals interested in luxury products. However, this segment of the business does pose challenges for a new brand like Caftari, whose package customization is still limited due to time-consuming warehouse logistics. 

“Each corporate gifting order’s size ranges from 20 to 50 units,” Aggarwal said. Aside from manually printing out personalized messages, which is more time-consuming than DTC orders, the cost of shipping is another aspect to consider. “Candles are expensive to ship because they’re heavy,” she said. The company will evaluate how to best automate this part of the business through a tech solution, such as Zest, when it hits the one-year mark later this year.

Solving a growing pain point

Zest’s founders saw an opportunity to help brands streamline and automate their corporate gifting business. “We found that corporate gifting for brands is one of the bigger opportunities, but it comes with some pain points,” Zest co-founder and CEO Alex Ingram told Modern Retail. When Zest originally launched in 2022, it helped with adding a “Send a gift” button to checkout pages. But it has since evolved to building branded digital portals for corporate gift shopping.

Ingram said that typically on most brand websites, visitors are directed to a contact form or email address to place corporate gift orders and then wait for a brand rep to get back to them to start the process. Zest is trying to eliminate this back and forth by directly integrating with the merchant’s existing DTC backend, allowing for real-time inventory and fulfillment management. 

There are some existing ways to offer corporate gift orders, such as getting on gifting marketplaces like Postal and Impact Dimensions, which Caftari and Cariuma respectively use. The challenge is that the marketplaces own that customer, Ingram said, as well as taking a cut from the sales. “But our biggest competitors are Excel sheets and contact forms,” Ingram said. 

Caftari, for instance, also sells through the Canal gifting marketplace. Aggarwal said these platforms allow the brand to sell at full price “but the platform takes a cut of each sale.”

A DTC integration bypasses that — one of the propositions Zest is offering is the “tight integration with Shopify,” said Ingram. This helps brands pull real-time inventory and sales data when large gift orders are placed. And with the latest white-labeling offering, Ingram said brands can host a Zest-powered website with their own branding. “Now, instead of logging into a Zest portal to place gift orders, customers feel like they’re logging into their own Levain or Milk Bar portal,” he said. 

Zest’s revenue model includes a monthly subscription fee the brand pays, along with a transaction fee that some brands choose to pass onto the gifter. According to the company, about 90% of its sales pipeline is through inbound interest, which comes from either word-of-mouth referrals from existing brand partners or after a brand sees the Zest-powered experience on another brand’s website.

Last holiday season was Zest’s first with its corporate gifting solution on the market, which served as a test run for its latest white-label launch due to the sales volume during the fourth quarter. Ingram said that during the 2023 holiday season, Milk Bar was able to automate 70% of its corporate gifting orders through Zest and cut down the processing time from two weeks to about two days. Meanwhile, olive oil brand Brightland grew its corporate gifting by 50% through its Zest-powered storefront.

The direct contact with the corporate gifting team also allows a brand to easily retarget an existing customer through an integration with Klaviyo. For example, it gives brands the ability to set up employee birthday or anniversary reminders to place a gift order whenever the date comes around. The other piece is allowing recipients to enter their accurate address and shipping time, to help avoid wasted shipments going to the wrong place.

“One of the things we hear from brands is that a 20-unit order takes just as much time to process as a 300-unit order,” Ingram said. “So a lot of our partners are excited to turn those smaller orders into a self-service process.” 

Meanwhile, brands that offer corporate gifting orders say it’s a worthy area to invest in the long run. “If you get corporate gifting right, it’s an amazing source of revenue and great for a new brand to build awareness through it,” Aggarwal said. “But it all comes down to execution.”