Handkerchiefs. A country music CD. A hand towel (with soap). All gifts I've received, and all proof that we need assistance with gift-giving ideas. The handkerchiefs have turned into great bandanas -- for my dog. The closest I come to country music is when "It's 5 O'Clock Somewhere." As for the hand towel and soap: Yes, this was an actual gift. No, I don't stink. (At least, not at the moment.)
It's the thought behind the gift that counts, right? Absolutely. But when Uncle Harry was eyeing that Kenny Chesney CD for me, he could have used some assistance in displaying his affection with an equally special gift. Who could help him?
Motley Fool Hidden Gems selection RedEnvelope's (NASDAQ:REDE) motto boldly claims that it's the place for "unique and specialized gifts." But there are plenty of competitors for consumers to choose from: eBay (NASDAQ:EBAY), Overstock.com (NASDAQ:OSTK), Tiffany (NYSE:TIF), and many more. What's stopping Amazon.com (NASDAQ:AMZN), with its massive distribution capability, from throwing together a more specialized online gift boutique to dwarf RedEnvelope with pure size and scale?
While the big players can outmuscle RedEnvelope, the little dot-com shops are currently outdoing the company with the uniqueness of their gifts. Yahoo.com (NASDAQ:YHOO) has tapped into this artistic market with Yahoo! Shopping, allowing small companies or individuals to establish a virtual storefront and sell some of the most specialized, customizable gifts anywhere in the world. eBay has long offered a similar service.
This is stiff competition to contend with. But if RedEnvelope thinks outside the box, it might have a shot at becoming the de facto standard in the specialty gift market.
The company's made one right move so far: distinctive packaging. Its gifts are wrapped in a red box with an ivory bow. It's a nice touch, but I think RedEnvelope should take this specialization a gigantic step further, making the boxes that contain its gifts as personalized as the items inside.
Anyone who has ever given or received a custom-designed, handcrafted box or card knows what a thoughtful gift they are. Since the first impression of every gift is found through the presentation -- the box and the card -- RedEnvelope should be known as the place to go for that unique, custom-crafted card or specialized box.
With all the Uncle Harrys out there scrambling for unique gift ideas, RedEnvelope has an opportunity to set itself apart from the competition through simple creativity. Doing so might just make its business model more sustainable and offer greater rewards to its shareholders -- a gift they'd doubtlessly be glad to receive.
We've wrapped up related Foolishness:
- RedEnvelope lowered its guidance for Q1 2006.
- Marko Djuranovic took a look inside the company -- and then another.
- Other gift companies are hurting, too.
Overstock.com is a Motley Fool Rule Breakers recommendation. Amazon.com is a Motley Fool Stock Advisor pick.
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Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.
