Growing Destinations
Your go-to source for insightful discussions on destination development. The Growing Destinations podcast delves into the strategies, challenges, and successes that drive community growth. Each episode features in-depth conversations with local and national experts, uncovering universal themes and innovative practices that can be applied to any city or region.
Growing Destinations
The Local Gift Revolution: How Neighborly Gifts Transformed Corporate Gifting
Sarah Richardson, of Rochester, Minnesota, never expected to transform corporate gifting. As a graphic designer, she was focused on helping clients build their brands. But when the pandemic hit, a weekend idea to create an e-commerce platform for locally sourced Easter baskets turned into Gift Rochester, raising $6,000 for local businesses in one week. When Mayo Clinic sought employee recognition gifts, the project exploded, growing 12,000% in its first year. Now known as Neighborly Gifts, the company operates in five states, partnering with 200 small businesses to create curated gift boxes for corporate clients.
The Growing Destinations podcast is brought to you by Experience Rochester. Learn more about Minnesota's third largest city, which is home to Mayo Clinic and features wonderful recreational and entertainment opportunities, by visiting experiencerochestermncom.
Speaker 2:This was the first time as a service provider to others. This was the first time I actually took my own creative energy and put it internal, and I think that's something to be said about entrepreneurs, especially service provider ones is what are you doing for yourself and for your company and for your brand and for your culture to get it stronger so you can ultimately then serve more?
Speaker 1:Welcome to the Growing Destinations podcast, where we take a deep dive into destination development and focus on a wide range of topics, from tourism and entertainment to economic development and entrepreneurism, and much more. I'm your host, bill Vaughn Bank. The best gifts are the ones with the biggest impact. That simple belief sparked the creation of Neighborly Gifts, a Rochester Minnesota company that makes corporate gift-giving easy while supporting local businesses. Belief sparked the creation of Neighborly Gifts, a Rochester Minnesota company that makes corporate gift giving easy while supporting local businesses. Joining me today is Sarah Richardson, the founder and CEO of Neighborly Gifts. We'll explore how a weekend idea during the early days of the pandemic turned into a sustainable and thriving company, and we discussed the role of community partnerships in fueling growth and what it takes to scale a business while staying true to its mission. Sarah Richardson, welcome to the Growing Destinations podcast.
Speaker 2:Thank you, Bill. It's such a pleasure to be here.
Speaker 1:I've known you a while here in Rochester Minnesota. Tell us a little bit about yourself and your background, my background started at the ripe age of 19.
Speaker 2:I am a little bit about yourself and your background. My background started at the ripe age of 19. I am a graphic designer by trade and I worked at a local agency for about six years, most of it in downtown. As a native from southeast Minnesota, my roots are really deep in the area. After the six years it really kind of just launched into my next wave, which was starting my own creative agency business in the branding and marketing world, and I've been doing that for 15. So my creation of the design side is really thick behind all this project.
Speaker 1:Take us to the early stages of this new venture, although it's got a few years behind it. Neighborly Gifts.
Speaker 2:The first rendition started in March 2020. And if you take yourself back to that moment, man, the emotions were high. We didn't know what was going on. We're told to go home, stay put, doors are forced to close my business. Fortunately, at that time we didn't have a huge shift because we were already working from home. There was four of us, so we didn't have such a disruption that others did.
Speaker 2:And one day we're just like. We're creative people. We solve problems. This is what we get paid to do from an agency's perspective. So what can we do to help our business friends? And that's really where it started was a brainstorming session on a Thursday with the team to. I remember that evening very vividly, going around and walking with my husband around Zolders Field Park and it's just sitting in the back of my brain and I'm chewing on it and I look at him and I'm just explaining this idea and he's like Sarah, just do it. So I just like almost ran home to our thousand square foot apartment downtown at that point and worked in my son's bedroom, because that's where my office was, and put together this website over a weekend by tapping on some friends' shoulders.
Speaker 1:So the entrepreneurial spirit helped you envision this new business. So tell us more about the business itself.
Speaker 2:The entrepreneurial spirit definitely did. I think it's the creator in me, the go-getter of we're just going to get in to do it. So it was less thinking and more like I'm going to design a website, so jumped on and did it. That weekend called up my network from the past, part of my history and my journey of just saying, hey, business friend owners, this is my crazy idea. Are you on board? And the idea was the idea was to create an e-commerce website with local gifts for kids' Easter baskets.
Speaker 1:Okay, so very specific.
Speaker 2:Very specific. We were at a timeline Easter's around the corner. As a mom myself, I was like man, you know, I kind of I don't love the idea of just the big box stores being able to get all this revenue where our friends were forced to shut their door and they don't necessarily have the e-commerce presence or the ability to buy from them at this time. So that was the very specific idea where, like, we can do this, it's one week. We got one week to start this project and finish this project and that's exactly what we did and it was focused on specifically those kid gifts for Easter baskets and 124 people ordered and $6,000 of money was directed back into those business owners.
Speaker 1:Were the business owners people you had already relationship with through your other business, or was it just you knew that you wanted to create an Easter basket and this would be a good product for it?
Speaker 2:Definitely had a relationship with them. They were in my phone so I'm texting and calling them, you know.
Speaker 1:Sounds like a true entrepreneur.
Speaker 2:Yeah, yeah, you just, you know when you're in the business world, and especially I was downtown and there's this very tight-knit community, so you just kind of know each other. You know when you're in the business world, and especially I was downtown and there's this very tight knit community, so you just kind of know each other. You know I'm calling Seamus at Carol's Corn, will Forsman at Cafe Steam, carol Bittnett Counterpoint. Some are past clients, some are just past fellow business owners and it's really that network that has driven me to get into that phase of saying, yeah, they trusted me, they trusted my work and they believe that this idea was a good one, and that alone gave me the even more confidence to just keep going A one-off, essentially, to start with over Easter.
Speaker 1:Did you create a name for it at that time?
Speaker 2:Yeah, the brainstorming to the website was 24 hours and at that point we're like what do we name this? We need a logo, we need a you know, an entire brand identity which you know very well how to do which that's our sweet spot.
Speaker 2:So the benefit is we didn't have to tap on anyone else's shoulders. We really just internalize and said, okay, we're going to put all our projects for clients aside, this is our core focus. I had a team of four and we just we just ran with it and really launched this website. That direct to consumer so we were selling to mostly friends and family in our network, pushed on social media and that was our model was direct to consumer and we did everything from built the website to sell it to customer support, to set up a temporary distribution center to fulfill them Contactless pickups. At that time we even did deliveries. We're wearing masks and gloves and being very careful of all this stuff that we're being told.
Speaker 1:It was for Easter, so how long of a timeframe was it to once you launched the website and people could start to order to pick up? Was it just a couple weeks?
Speaker 2:It was one week Bill. One week, One week.
Speaker 1:From the launch.
Speaker 2:Yeah, from the launch, we the weekend, so the Thursday's the brainstorming. I built the website and we built the brand over the weekend.
Speaker 1:And it was called at that time.
Speaker 2:Gift Rochester.
Speaker 1:Gift Rochester okay.
Speaker 2:Yep, Gift, Rochester and beautiful. It all kind of just came together. We launched really that early that next week Monday, Tuesday, let orders come in, we closed it and then it was fulfilling the following week weekend, just in time.
Speaker 1:What happened after that?
Speaker 2:I put it back on the shelf and said that was fun, that was exhausting. We really, as most new ideas, you don't know what you're doing until you're in it and we're building the plane as it's flying. It's a project. I got everyone in my family involved, whether they liked it or not, which tends to happen, but we had so many amazing people with volunteers helping and supporting it along the way. It was kind of just back to business. We had to get back to our. You know, Easter's gone and now we have to go to our clients and give them the attention that they need. So it was shelved, but it was always kind of just sitting there, Because I will say there was a moment throughout that entire week that I found a spark that I haven't felt in a while.
Speaker 1:When did you take it off the shelf?
Speaker 2:Fast forward about four months, I would say Late summer. Very close friend of mine who is the executive director for RDA the Rochester Downtown Alliance.
Speaker 2:Yes, holly Masick and she was in a meeting with some representatives from Mayo Clinic and they were talking about employee recognition and how can they recognize their employees this coming holiday when they're working from home. So no in-person holiday parties, and she, just like she was a part of the Easter program, holly was, and she just mentioned hey, you should talk to my friend Sarah over at this Gift Rochester business. She kind of did, just made that connection and then it really kind of became a phone call after the connection of them asking can we do something similar for their employees for that coming holiday? And this is about August Of 2021?
Speaker 1:Of 2020. 2020 still okay.
Speaker 2:We're still in 2020. So about August, late summer. This is the call that I had with representatives in Mayo and I just said, as I love to do yeah, let's do it, let's do it.
Speaker 1:And it was a recognition program over the holiday season just for Rochester Mayo Clinic employees.
Speaker 2:At this time it was really isolated to Rochester and really kind of focusing even on the downtown. So for Mayo it could be open to any manager, because there are managers that are existing here but have team across the country and then there's also vice versa, where there's some onsite and some not. So we really created a program that was open to anyone that wanted to order. It was an option for the managers to order For vendors. We knew, going from eight small businesses during Easter to servicing our state's largest employer for holiday, we needed more vendors, we need more products. So we really said okay to do this and do it right in a short timeframe. I'm going to partner with the Rochester Downtown Alliance and leverage their connections with their constituents.
Speaker 2:So we had a collaborative relationship that said, okay, we're going to bring it into downtown, so any downtown business could have applied. We got 50 businesses between the restaurants and brick and mortar stores. So there was excitement and energy there and again we're creating this as we're going. So things like the restaurant voucher program is a new one at this point, to what kind of goods are we offering? So it was really that was our first rendition and it was solely focused in downtown in 2020, but our sales at the end of this we grew 12,000%, which ended the year of holiday 2020 with 15,000 gifts and just shy of $365,000 in impact.
Speaker 1:Wow, yeah, incredible. And was it still your small team you had?
Speaker 2:Yes, small team. And I will tell you, my father, who's retired, a small business owner himself, is the one that's jumping in the U-Haul with me to go get shelves from Facebook Marketplace in the cities to set up a pop-up warehouse downtown to do this fulfillment. Because, again, we were not just building the vendor relations, we were creating the e-commerce website, we were the customer support to our client and then we filled it, we packed and shipped gifts, we packed and prepared them for pickup and it was just a wild time filled with volunteers of family and friends and really anyone that's like I'll jump in and pack some boxes.
Speaker 1:At this point, mayo Clinic was the only client then, at this point, yes.
Speaker 2:We took this project that I call it from March 2020 off the shelf to say, well, it worked. Then, in a small scale, let's try this, why not? Let's see what it does Curious.
Speaker 1:Mayo Clinic's big, and Rochester is just one of their markets.
Speaker 2:Absolutely.
Speaker 1:So fast forward a bit. And how did that?
Speaker 2:grow. Fast forward a bit to. We just closed our fifth holiday season with Mayo Clinic. We are now in five states representing their territories, so their neighborhoods, going from holiday 2020 to this holiday 2024,. We've just been really listening to them, listening to the gift recipients, the employees who are receiving the gifts to help us build the catalog, the data that's been performing to. We've been listening to the managers. They've been constantly asking you know, how about this? Can you do this? Are you guys open? And as a small team we're three full-time people we can do that, we can be flexible, we can be a little agile. So we have, in the period of the four years, have rebranded, because gift Rochester, when we moved to Phoenix Arizona, was weird, obviously didn't work.
Speaker 2:So Jacksonville, florida and then we went to Jacksonville. But before we went to Jacksonville or Wisconsin was really at that point we knew we needed a rename. So that's where Neighborly Gifts came in, and that took a while. It took a while to come to the name. We wanted something that was going to embody the essence of this mission that we're creating. We also wanted something that was ownable, so trademarking, making sure that we had some longevity, that if we're going to do this, let's do it right. So we went down that process with legal including we also our product development during this timeline and working with our client Mayo Clinic, our customers, to say, hey, can we do this, Does this meet your policy and how can we?
Speaker 1:really service the restaurant community specifically, what were some key decisions or turning points that allow Neighborly Gifts to transition from just a one-off seasonal project to working with Mayo Clinic in five states?
Speaker 2:I think the number one is I have to give credit to my team, the internal team as a small agency that were hired as graphic designers. They stepped up every path of the way to everything from creating a new brand to fulfilling boxes. Without them we wouldn't have been able to do the fulfillment and test and trial, including volunteers and then really our vendor pool. I mean, this is the backbone and the heart of this entire mission is, without them saying yes and they're on board with this, we wouldn't have a product to sell, and our place in this relationship is truly about just creating this bridge between them.
Speaker 2:So my mission has always been the big guys are already recognizing their team and they're doing it through things like a branded coffee mug. They're already spending those dollars. We know that exists. They want to do the good by supporting local, but what we're hearing is managers, it's hard. I don't want to go to 14 stores or there isn't one place to make it convenient. So those pieces along the way have helped us realize that this singular website to excitement, but also just the growth tells the numbers, tell itself that this is an option for them and they chose it because it has a bigger impact than just that one gift. The gift of delivery provides the appreciation, but that gift really actually supports so many more neighbors within their community.
Speaker 1:In Florida or Arizona? Are the gift boxes related to products from those communities?
Speaker 2:Absolutely. We created a private store it's called a private gift store for Mayo Clinic managers that they have to request access to shop for security reasons. The private store is filled with criteria that our customers told us. We have price point criteria, obviously, their locations, the geography. We have gifts from small businesses in all five states. We do solely focus on the Jacksonville campus, the Phoenix campus, along with, obviously, the Rochester campus and then expanding into the enterprise with the smaller clinics around Wisconsin, even Iowa. So we have at this point, 200 businesses that are partnering with us vendors across those five states that we can tap into for whether it's a curated gift box for a conference that someone wants to add that flair of local and have that support, or it's the year-round catalog that managers can buy and shop anytime. It's open for male managers year-round for any gifting, whether that be Nurses Week to the holiday.
Speaker 1:Sarah, the success of this program is evident and you have a lot of growth with Mayo Clinic. Will you continue that relationship?
Speaker 2:Definitely, this idea really started as a way to help bridge their workforce at home. During COVID, However, it was met with such warmth and success from the managers ordering that it's continued to the point that we just finished our fifth year and they have signed a five-year contract for it to continue for the next five years as an offering. This is I forgot to mention. This is a choice. This is not required. This is a choice that managers can choose us as their gifting platform. So that kind of says it all when we see managers choosing us and coming back year after year and giving us that feedback.
Speaker 1:Great success, congratulations.
Speaker 2:Thank you.
Speaker 1:Can other corporations do this as well?
Speaker 2:We have created private stores for other corporations, mostly because of word of mouth and some great relationships like ThinkBank has done two holidays with us through a private store. We've done some gift boxes for some smaller local clients Experience Rochester being one of them, elcor Construction, jimmy's Salad Dressings and Dips and those are really only because we have a relationship built with them and they're like Sarah, what are you doing over there? Hey, can we? We want to. Can you do this for us? And it's not that we're holding the door closed. We just had to, over the last five years, really go from a tiny project to a full-fledged year-round business. That's growing at a rapid pace, kind of hold back our sales and adding on other corporations, but that's changing.
Speaker 1:Tell us what's next.
Speaker 2:Yeah. So the reason we've held back is a big one. For us right now is space. You know we've moved a number of times. Our big move happened in 2022 of going into a 5,000 square foot space office warehouse combination and we are busting at the seams. This last holiday was the last holiday we could function in this place. Our lease is actually up here in the fall, so good timing. So I've been on a mission to find commercial real estate for the last how long. So there's a decision to be made about where that's going to be located, and that space will not only allow us to take on more customers, more vendors, more products, but offering potentially other services. This last year we started doing some pop-ups, just on obviously a very local Rochester scale, but just dabbling into not necessarily the brick and mortar retail space, but more experiential pop-up version of retails to bring it to a different clientele.
Speaker 1:Can you do this year round, or do you primarily focus on the holidays?
Speaker 2:We do it year round.
Speaker 1:Okay.
Speaker 2:Yes, we absolutely have year round, and we're really amplifying our other nine months out of the year because holidays are always going to be a big gifting season.
Speaker 2:It's just, we want appreciation end of year, but no, there's plenty of things happening like this Friday is employee appreciation day, so there's plenty of things happening like this Friday is Employee Appreciation Day, so there's a lot of gifts going out the door. We have things like Nurses Week, the Bloodmobiles, offering our gifts for the people that are donating, conferences. We've done gift boxes, client appreciations. We're really focused, though, on that corporate gifting versus the public or general holidays, like a Valentine's Day. We feel our retailers. We don't want to compete with them on that level. Go directly to them if you want to provide that gift. We found a gap in the market of just really finding that corporate gifting to get it down to the little guys in a quicker, easier, more seamless fashion.
Speaker 1:What are some of the most important lessons you've learned about launching and growing a business?
Speaker 2:I think one of the lesson I'm really realizing is, you know, being in my career for a few decades is all of this. I didn't have a plan. It doesn't necessarily align to where I thought I was going to be, but it's really just listening and continuing to follow that spark, and I've always been a person that likes to do change and adjust if I'm not feeling something a hundred percent. So when that project hit and provided that spark that I was talking about earlier, I knew something was there and I just knew there was something about it. As a creative, this was the first time as a service provider to others, this was the first time I actually took my own creative energy and put it internal. And I think that's something to be said about entrepreneurs, especially service provider ones is what are you doing for yourself and for your company and for your brand and for your culture to get it stronger so you can ultimately then serve more?
Speaker 1:What's the most rewarding part of running neighborly gifts today?
Speaker 2:Oh man, the impact, the data. I mean I'm not really a data geek, I'm definitely more of a relations. I like the emotional side of it too, and I could sit and talk about dozens of amazing accomplishments our small business vendors have had. I mean even the growth from when we started. We had one this year who won Oprah's favorite things list for the holiday. It was just getting that phone call of Charles at Lovejoy's telling us he made that list was just like we screamed in excitement. So my favorite part is to be champions of these amazing small business entrepreneurs. Our goal is to do more with them and to support more of their growth.
Speaker 2:But at the end of the day, this data, this impact, is something that I just really didn't anticipate. But have always had a love affair for buying local. You know, even as a little girl in the agricultural and farmer's markets, the appreciation of it, just knowing it. It's an ethos in my roots that goes very deep. So I think it's just finding I get to live out the dream of sourcing local goods and making it easy for people to buy them.
Speaker 1:Sarah Richardson, it's wonderful to hear about all of your great success over the past five years with Neighborly Gifts. We really appreciate you taking time to be our guest today on the Growing Destinations podcast.
Speaker 2:Yes, thank you. I so appreciate you having me and allowing me to tell this story.
Speaker 1:Thank you for tuning in to the Growing Destinations podcast and don't forget to subscribe. This podcast is brought to you by Experience Rochester. Find out more about Rochester, Minnesota, and its growing arts and culture scene, its international culinary flavors and award-winning craft beer by visiting experiencerochestermncom.
