Christmas is a busy period for e-commerce businesses and retailers. Everyone experiences a surge in activity, mainly due to the Christmas gift rush. This race begins for every French citizen as early as October for the most organized and lasts until the very last minute on December 24th for the procrastinators.
For brands and retailers, it’s a battle every year. Faced with increasingly fierce competition and the growing difficulty of customer loyalty, they implement customer acquisition strategies to differentiate themselves from other brands. The most commonly used strategy is undoubtedly the promotional strategy (discount vouchers, giveaways, gift cards, etc.). This strategy has proven successful, but it’s important not to overwhelm consumers. So, how can you stand out in promotions?
Promotions: An Effective Tool for the Holidays
Sales promotions are an effective strategic approach because they can temporarily change consumer behavior. 63% of consumers say that a promotion can trigger a purchase, especially when they are undecided. This effect leads to increased sales in the short term, boosting business activity. It’s an advantage, but one that is limited in time. However, it’s a formidable technique that bears fruit, especially during highly competitive periods like Christmas. It’s not surprising to see retailers, especially mass-market ones, using it to increase their market share during the year-end. From discounts to gifts, everything is fair game to attract non-consumers and loyal customers to visit the store or website.
Discount Codes Are Overused During Christmas
Discount codes are widely used, especially on e-commerce websites. While they are indeed effective tools, they have their drawbacks. During the holiday season, numerous brands employ this tactic. The result is that consumers have become accustomed to paying below the full price for their gifts. Over the years, they have evolved into ‘opportunistic’ shoppers always on the lookout for the best deals, often forgetting about the brand itself. These constant discounts can erode the brand and product image. Therefore, it’s crucial to establish a promotional strategy that considers the brand’s positioning and product range. Having an overall view, finding the perfect timing, and aligning various actions can result in a coherent strategy for the brand.
The promotion system should also align with consumer expectations to yield an efficient return on investment and stimulate acquisition. This is a crucial factor for consumers when choosing one brand over another during the Christmas period.
What Type of Promotion to Choose for the Holidays?
Consumers today are ‘omniconsumers,’ meaning they use various channels in their buying processes, either successively or simultaneously. They might gather information on social media and specialized blogs, select products through search engines, try them in physical stores, and finally make a purchase on mobile without leaving the store. All channels are engaged, and brands are increasingly implementing omnichannel solutions like click and collect or connected stores to address these changing behaviors.
However, while retailers have considered omnichannel tactics, it’s not always the case for promotions. Electronic coupons commonly found on e-commerce websites, for example, might not necessarily be valid in physical stores. Yet, consumers expect the same functionalities and possibilities online and offline. It’s crucial to work on promotions across different channels to reach consumers in the right place and at the right time to encourage purchases.
In addition to omnichannel considerations, it’s essential to think about what is most effective in attracting new consumers, especially during the Christmas season. Do consumers really want discounts, especially during Christmas?
In recent years, gift cards have become one of the most requested gifts during the holidays. Seen as a practical yet unique gift due to personalization, they are perfect for buyers. For recipients, they allow some to discover a new brand and, most importantly, indulge themselves by buying what they desire. In the United States, 60% of new customers are highly interested in this type of promotion.
And since it can be used as a promotional tool, one can easily imagine the power of such a promotion during the Christmas season.
Promotional Strategies with E-Gift Cards at Christmas
Using gift cards as a promotion can be a differentiating factor for a brand. However, it is still rare to see brands using gift cards, even though adoption is underway. More valued by consumers than discount coupons, gift cards can be a determining factor in getting someone to visit a brand’s store rather than a competitor’s.
There are various effective strategies that can be implemented during Christmas.
E-Gift Cards to Attract Early Buyers
Early buyers are highly organized individuals who decide to prepare their Christmas gifts in advance. Their primary motivation is to find good deals, so they seek to maximize the value of a beautiful gift within their budget. Budget is still a major concern for 53% of buyers.*
To attract this type of customer, offering promotions seems appropriate, which is entirely possible with a gift card. It can be valid on the website or in physical stores, making it an omnichannel promotion. However, how it will be applied depends on the determined objectives and what brands wish to achieve.
- If the brand wants to boost a category of products or a specific product for the holidays, the gift card can accompany it. This means that for a specific type of product purchased, the brand offers the consumer a gift card with a predefined amount. 81% of consumers say they are motivated to purchase a product if there is a gift card promotion applied.
- If the brand wants to increase the average shopping cart value during the holiday season, it can offer to give a gift card of a certain amount for each spending threshold. The more consumers fill their shopping carts, the higher the value of the gift card.
- Gift cards can be used to influence buyer behavior. For example, if the brand wants a specific payment method to be used more frequently, offering a gift card can help move in that direction.
In any case, gift cards allow buyers to take the leap and try new products or brands. They can then return to spend the earned gift card value within the store or on the website.
Using Gift Cards for Current Brand Customers
Whether they are newly acquired customers or long-time customers, brands have every reason to encourage them to do their end-of-year shopping through their sales channels.
How to do it? The gift card, as a promotional tool, still has a role to play. Offering it, always with a predefined amount, during the holiday season is motivating enough for consumers to want to visit the store or go to the website. Through a well-segmented email campaign, it is a fantastic tool for capturing potential buyers.
Promotion through Gift Cards for the Indecisive
Cart abandonment is a common issue during the holiday season. It is a real challenge for brands and retailers. Every abandoned cart means a potential sale could have occurred. This loss can quickly become significant if brands do not take necessary measures.
Several solutions exist to reduce this rate, including improving the shopping journey, being more transparent, providing reassurance, and more. However, one of the most used solutions is retargeting. It’s an opportunity for some brands to offer a promotion, which typically involves a discount code. But in this context, brands can also offer a gift card, a powerful and more relevant tool during the holiday season.
Furthermore, gift cards can be used to address product availability issues. During Christmas, demand is high, and even with a robust supply chain, products can sometimes run out of stock due to their popularity. This means lost sales opportunities for the retailer. In such cases, the retailer can offer the gift card as an alternative. Consumers who decide to buy the gift card for the same amount as the out-of-stock item can then give it to the recipient, who can later use it to purchase the product when it’s back in stock. The result: a reduction in lost sales.
Promotion on the Gift Card Itself
As we’ve seen, gift cards can be used as a complete promotional tool for products, purchase amounts, and more. However, during Christmas, it’s essential not to forget that gift cards can also be considered products themselves. More and more people in France like to buy this type of gift and are looking for such products. To ensure that a consumer buys a brand’s gift card rather than another, implementing a promotion strategy can be relevant.
Brands have several options for promotions:
- Monetary discount: For a €50 gift card, a brand can decide to sell it for €40, offering a €10 discount. 82% of consumers are more motivated to make a purchase this way. Some may be tempted to buy it as a gift for Christmas, while others will purchase it to make subsequent purchases within the brand. In either case, the brand benefits.
- Use the gift card: To tip the scales, brands can offer a gift card of a specific amount based on the amount of the gift card purchased. One card for another. Brands can even offer the person buying the card to give the other card, as part of the promotion, to a friend or family member. With this technique, some brands have shown ingenuity. During the last holiday season, for everyone who bought a gift card, brands offered a chance to win a free gift card with a surprise amount. This could range from €5 to €200. It’s a mechanic reminiscent of games of chance that helped boost sales.
To boost Christmas sales, mass-market brands have every reason to use promotions. However, consumers, tired of endless discounts, desire the right promotions at the right time, available through omnichannel means. To stand out, brands and retailers can utilize gift cards, the new kid on the block. Different strategies exist to implement them, but the right questions need to be asked. Do brands want to boost sales for specific products? Or increase the average basket size? In any case, if used effectively, the return on investment can be very profitable for retailers. Gift card holders generally spend beyond the initial amount.
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