Do retailers need to jump on the e-gift card bandwagon?
Gift cards were among the big sales successes of 2020 as they were in high demand by Gen Z consumers and Millennials. Expectations are that the conditions that led to a 19 percent year-over-year gain last year, per Blackhawk Network, will carry on in the next twelve months.
While gift cards were once considered to be impersonal or a means to a quick and easy last-minute gift, that is no longer the case. Usage, particularly in e-gift cards, is growing rapidly through the use of smartphones, digital wallets and mobile apps.
Gift card providers, including Amazon.com, Apple, Google and Starbucks, are leading the way on the digital front. Selling cards is a smart sales move because cardholders nearly always spend more than card face value. They also provide the added benefit of making recipient contact details known to retailers, unlike anonymous physical cards.
Here are three ways retailers can adapt and use e-gift cards to grow sales, profits and loyalty in 2021.
- Implement digital systems as e-gift card adoption continues to grow in popularity. Develop digital gift card capabilities across all storefronts. Make sure they are easy for customers and associates to use. Collect, interpret and leverage data to connect with customers, improve assortment and improve promotions.
- Stock fresh merchandise. Stock new (full price) merchandise for sale when shoppers are ready to cash in their holiday gift cards. Phase in new merchandise and promote existing inventory through the first quarter. Find a clever way to hold “treasure hunts” featuring returned items or “final few” items.
- Launch compelling campaigns. Engage with purchaser and recipient cohorts. Identify channel(s) and create content and actions for each step on the path to purchase, focusing on education, awareness, research and post-purchase satisfaction. Offer “Buy x get another smaller gift card” or “10% off if using a gift card.” Provide balance and reminder information to recipients to spur sales and goodwill. Look for ways to cross-market or co-promote with other nearby businesses as many cards were given to support local small and medium businesses.
The pandemic has forced all retailers to offer new online services to shoppers. E-gift cards present retailers with a highly qualified new stream of consumers and revenue. Smart retailers are taking advantage of the insights yielded by these new digital initiatives to implement new merchandising and marketing programs that drive sales and loyalty.
- Americans are on track to buy more gift cards this holiday season than ever before – Fortune
- Gift Cards Are the Go-To Holiday Gifts of 2020 –The Wall Street Journal
DISCUSSION QUESTIONS: Do you see a growing opportunity for gift cards, particularly digital versions, to boost retail performance in 2021? What can retailers do to fully leverage the opportunity upfront and following purchases made with gift cards?