Retail TouchPoints: Digital Gift Card Services Increase Loyalty, Create Seamless Exchange and Redemption Process
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
With the increased adoption of mobile commerce, digital gift cards are a new tactic to drive in-store traffic and loyalty without focusing on discounting strategies such as coupons and daily deals. In turn, start-up companies such as Wrapp are establishing themselves in the e-gift card space.
Wrapp is a social gifting service designed to allow users to purchase gift cards via mobile and web, and then send them to friends. The Wrapp application can be downloaded for the iPhone or Android, or linked to a customer’s Facebook account. Once a gift card is purchased, the company sends a customized message to the receiver via Facebook and/or the Wrapp app for redemption.
Through the Facebook integration, Wrapp allows retailers to “connect the dots” between mobile, social loyalty initiatives and the in-store experience, according to Hjalmar Winbladh, CEO of Wrapp. “The most common wall post on Facebook is when someone says ‘happy birthday’ to a friend. We think that’s nice, but there’s a major gap between just saying ‘happy birthday’ and being able to include a gift seamlessly. We’d like to make giving a gift card as easy as posting a simple communication.”
One benefit of having the gift card directly linked to the smartphone is that consumers have it with them at all times, he said. When shoppers walk into a store, they simply press ‘Redeem’ on the Wrapp app to receive a barcode that can be scanned at point-of-sale. E-gift card receivers also can enter a unique voucher code to redeem gift cards via the web.
But Mr. Winbladh anticipates that digital gift cards can help retailers increase loyalty and in-store traffic. “Big retailers and merchants tend not to like couponing sites and daily deals mainly because they’re training the customer to look for a deal,” Mr. Winbladh said. “Discounts and coupons also don’t drive loyalty. Our goal was determine how retailers can build loyalty and bring people in-store without driving the process with discounts and pricing. Wrapp is all about giving things to each other, and having that value in-pocket at all times.”
The application currently only operates in Sweden but consumers worldwide can buy and share digital gift cards with friends and family who reside in the country. Wrapp is expected to expand to retailers in the U.S. and UK during Q1 2012. Founded in the first half of 2011 by a group of serial entrepreneurs, Wrapp is based in Stockholm, London and Silicon Valley.
- Digital Gift Card Services Increase Loyalty, Create Seamless Exchange And Redemption Process – Retail TouchPoints
Discussion Questions: What do you think of digital gift card services as a sales mechanism as well as a tool to drive in-store traffic and loyalty? Do you agree that digital cards appear to be a natural for Facebook?