Christmas is just in a few months, but the time to prepare has already come for brands. Many consumers will be doing their traditional holiday shopping soon. And between gifts, preparations and meals, a lot is spent. In 2019, the average European budget was €460, and the average budget in the US was $882). To best benefit from this profitable time of the year, brands must already carefully prepare and tailor their strategy for the holidays.
And why not place digital gift cards at the heart of this strategy? Gift cards are now as much part of the holiday landscape as toys, books and chocolate. In fact, they are becoming consumers’ favorite gift in many countries. To be more specific, it is the e-gift card that is in the spotlight. In the US, they are growing at an annual rate of 200%. And other countries such as France, Italy and Germany are heading in the same direction. Since digital gift cards are growing at a faster rate than plastic cards, it makes more sense for brands to offer them, especially around the holiday season. With key days such as Black Friday or Christmas Eve, sales are multiplied.
Digital gift cards: the ideal Christmas gift for consumers
A hassle-free present
Seeing e-gift cards on top of people’s Christmas lists is no surprise considering they meet consumer needs and expectations. The buyer can quickly buy them, in just a few clicks, and instantly send them to the recipient. Which enables her/him to optimize the time spent on Christmas shopping and not worry about the time left before the D day.
Another equally essential point: gift cards are a better present than pocket money. Sure, both are easy to give, hassle-free, and enable you to please without getting it wrong. However, digital gift cards have the advantage of being customizable, and enable the buyer to add a specific and personal message. A little extra attention which adds a dash of Christmas magic. It is a plus for the brand, who can now reach a specific target that they would have missed had they not offered e-gift cards.
Recipients have added gift cards on top of their Christmas list. And for a reason, they love receiving them, especially Millennials. They are sure not to be disappointed because they are spoiled for choice. No need to fake a smile when discovering yet another book or jewelry you don’t like. With gift cards, the giver lets the recipient choose what pleases them. And if it is digital, the card can be used and saved on all devices, smartphones included.
Going digital brings significant added value considering mobile is now a key element in customer experience. Especially when more than 50% of consumers prefer to have their card scanned from their phone rather than carry an email printout. * And it is also an advantage for brands, allowing customers to have gift cards on their phone enables brands to better communicate with them. Via push notifications, they can bring traffic in stores, send relevant information, and so on…
Boosting holiday sales for brands
But for brands, what truly matters in the end is the additional sales made thanks to digital gift cards.
The latter is a whole new product for the brand, and the demand for gift cards always soars during the holidays. As a result, brands will make many more online sales and will attract more traffic on their website. It is all the more interesting seeing online shopping represented 21% of overall holiday sales in 2019. *
Additional sales made thanks to gift cards directly boosts revenue. When a gift card holder enters a physical or online store, he/she never spends the exact amount on the card. On the contrary, consumers tend to go over their gift card’s face value. In fact, 65% of gift card users spend 38% over the face value of their cards when making a purchase.
How come? Well, it is all about the card holder’s behavior. Since they already have “free money”, they are more likely to make impulse purchases and buy products they would not normally get. Moreover, the recipient will feel free to buy full-priced items (2.5 times more likely, according to the National Retail Federation). And as a result, they will be much less receptive to promotions and low prices.
*Kantar, Winter Holiday 2019 study
Digital gift cards: a powerful marketing tool for the holidays
In addition to being a new product offered by the brand, the e-gift card is a great marketing tool to use during the holiday season.
Acquiring new customers
When someone buys a gift card, the recipient is not necessarily familiar with the brand. Christmas is a special time of the year, and buyers are more willing to introduce their relatives to a new brand through gift cards. It is a way to offer them a new experience. The brand acquires a new customer, which must then be retained.
And even if the recipient knows the brand and asked for their gift card, you can still gain a new customer through the buyer. It will be his/her turn to get to know the brand and its products. Both ways, gift cards are an opportunity for the brand to gain new customers. That is why it is important to develop an efficient marketing strategy in line with these scenarios.
Rewarding current customers
Digital gift cards are a great tool to influence consumer behavior. Easily issued, customers love receiving them. Who wouldn’t enjoy receiving an instant digital reward to thank them for their loyalty? On top of that, e-gift cards can seal the deal when customers are having doubts before proceeding with an online purchase. They also bring traffic in physical as well as online stores, and help the brand reconnect with former customers, … In short, brands can only benefit from having a gift card program.
Reach a wider audience
What is more, thanks to gift cards, brands are able to broaden their customer base. On the one hand, by offering their e-gift cards through third party distributors. And then, by offering their program to works councils and companies.
E-gift cards are, without doubt, a strategic cornerstone to enable brands to perform to the best of their abilities during the holiday season. Boosting revenue, meeting consumer needs, managing customer base, … digital gift cards must be placed at the heart of your holiday strategy. Once implemented, you will benefit from this program each holiday season, as well as the rest of the year.
Suggestions for further reading
How to successfully implement a gift card program for the holidays?
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