Are you making the most of your Gift Card this January?
Forget socks and Lynx body sets…gift cards are the perfect Christmas gift. Not only do they avoid waste with poor gifting choices, they give customers flexibility to spend how, when and where they want to.
Statista research shows that for Christmas last year 39% of people in the UK wanted gift cards and vouchers over any other gift. In addition the Gift Card and Voucher Association (GCVA) reports that 14% of adults plan to increase spending on gift cards to better manage their gifting budgets and avoid wasting money on unwanted presents.
So with the new year in full swing, it’s the perfect time for consumers to be out spending… and an even better time to think about your gift card strategy.
Many retailers still aren’t embracing gift cards…
Whether they’re deemed an ‘old school’ sales tactic, or there’s just more exciting technology and channels to focus on, the gift card has been neglected over the years. In December the team at Edenred Payment Solutions zig zagged down Oxford street shuffling between the crowds to see how retailers were promoting their gift cards to customers – and we saw some very mixed results.
We expected to see gift cards in every store especially in December, after all if a customer can’t find what they are looking for or an item is out of stock then the gift card is a great alternative, but what we actually found was that in many instances the cards – while available – were not on display.
There were some standout examples – M&S had aligned their product artwork to match the Christmas show material, creating a uniform and clear proposition and strengthening brand recognition. They had promotional stands located throughout the store and at checkouts capturing those last-minute impulse purchases. Likewise H&M had seasonal gift card designs and extra displays located all around their stores.
Uniqlo had in store gift cards, but in the stores we visited, we had to ask a member of the team where to find them. That’s especially jarring in a retailer where self-check-out is prominent. However their online approach was much stronger, as they maximised the power of their mailing list and nailed the last minute gifts messaging.
Why is this the case?
It’s clear that gift card development is falling foul to other technical enhancements and priorities after all, if it does what it needs to then why make it better?
Usually, retailers will offer a gift card directly to their customers because it’s something that customers expect rather than something the brand or retailer is actively engaged with. It’s common to see shops offering digital gift cards online or physical cards in their own stores, but they often feel like an afterthought. Ultimately, a lot of retailers haven’t changed their approach to gift cards in years, and it’s a huge, missed opportunity with research showing how much customers want them.
How can retailers make gift cards a success:
1. Have a clear owner of the program, one who’s invested in genuine success:
Like all successful things in business, it needs time and focus to create a successful gift card program. The best ones will have a dedicated person or team managing them, and they will be tuned into the broader retailer strategy, leaning on other stakeholders to align the gift card to other products and promotional activity. Without this in place, it’s easy to see how a gift card program can simply become a liability and a cost on the balance sheet.
2. Create a positive redemption experience to increase customer loyalty
Consumers have an incentive in their pocket to go out either in person or online to a specific retailer and spend guilt free. In the cost of living crisis, it’s not about exploiting shoppers to spend more than they can afford but a £30 voucher spent on a £50 dress gives retailers two bites at the cherry.
So if a retailer can create a positive redemption experience it’s likely customers will exceed the gift card balance, and potentially even become regular customers. That overspill, and possible customer acquisition is a huge opportunity for retailers to maximise shoppers’ intentions.
3. Make sure your gift card doesn’t expire or go unused
The best gift card experience is one that brings a customer back in store time and time again. In the US alone it is reported that over $21B of gift cards go unspent each year, and while breakage may offset some of the program costs, it shouldn’t be the only metric to monitor. Don’t sacrifice ease of redemption in favour of breakage.
January might be inching away, but a gift card program is for life, not just for Christmas. There’s never a bad time to improve such a high-demand part of your sales strategy, but I think January is a pretty good one.
………………………..
If you’d like to find you how Edenred can help your retail operation, reach out to Alec Donald, Retail Business Development Lead at Edenred Payment Solutions.
