Top 10 reasons why a brand should offer digital gift cards

by | 20 Jul, 2020 | INSIGHTS

What reasons lay behind launching a gift card program? And how to reap its benefits?

In addition to looking for ways to strengthen the bond with their customers, brands are constantly looking for new associated products and services. Indeed, to settle their position in the current market, they have to continuously evolve and question the existing model. To prosper, brands must follow market trends, new technologies as well as the latest change in customer behaviors and expectations.

Nowadays, digital gift cards are definitely part of the recent developments that should be taken into account. They are already widely implemented in the strategies of some of the largest American brands such as Walmart or Starbucks. In fact, American consumers have been won over, and digital gift cards are now rooted in their everyday habits.

This phenomenon is gaining ground in Europe as well. In France, several major retailers such as Leclerc, Decathlon or Ikea already use them in their strategy. But it does not seem like much considering the tremendous untapped potential they offer. Why should brands implement a digital gift card program?


What are digital gift cards?

First of all, let’s provide an overview of what digital gift cards are really all about. E-gift cards are the digital counterparts of plastic gift cards. There’s no need to wait for delivery anymore, e-gift cards are instantly sent to the recipient in PDF by email. Customizable, usable on all devices, they really have it all.

1: To increase revenue

Gift cards are a new product offered to customers, therefore, they are an opportunity to increase revenue. This growth does not only come from the purchase of said cards, but also the additional revenue they generate. That is to say, all purchases made by cardholders beyond the gift card’s value. Several studies have shown that impulse purchases are very common with gift card recipients, which only increases their potential.

2: To stand out among other promotional strategies

The intense advertising clutter, paired with the drop of consumers’ attention span, forces brands to bend over backwards to stand out and be heard. One of the most common strategy is to use e-coupons and promotional codes to trigger purchases or increase the average shopping basket. However, their overuse has made the value of these tools decline in the eyes of consumers. They are now used to receiving them and do not see them as a differentiating factor. What if they were replaced by digital gift cards? They are more customizable and create a direct link between the brand and its customers.

3: To reach new customers

Among those who buy digital gift cards on a brand’s website, many are new customers that wouldn’t have bothered visiting otherwise. These specific customers are looking to please a relative that already loves the brand, or is likely to love it. For example, take a husband looking for a gift for his partner. He naturally turns towards her/his favorite brands. But what product should he buy? What would best suit their partner’s taste? What about simply buying a digital gift card? At least, that way, he is sure to please without getting it wrong.

4: To boost loyalty programs

Loyalty programs are widely implemented. In fact, they play a crucial role to build lasting customer relationships. However, if we take a closer look, we seldom see differentiating factors. Almost all programs work on a similar basis and has similar offers.

This is when digital gift cards come into play. They draw customers to the physical or online stores and encourage impulse purchasing. They are an ideal tool for loyalty programs. But most importantly, because they are customizable, cards give brands the ability to create a privileged relationship with their customers. Which is better: getting a voucher as a reward, or receiving an e-gift card with your name on it?

5: To create an additional contact point

E-gift cards are an additional contact point for brands. Recipients always have them within easy reach on their smartphone or their computer. Therefore, digital gift cards improve brand awareness. Especially when someone receives a card from a relative, and it is for a brand they are not familiar with. In this case, the relative acts somewhat as an “ambassador”, by recommending the brand through the e-gift card.

6: To get to know customers better

When a gift card is redeemed, brands can track it and collect data from it. How much was spent, when and how often. Which products or services were purchased and if they exceeded the gift card’s face value. When digital gift cards are sent during an emailing campaign, brands are able to precisely measure the ROI.

7: To encourage last minute sales

During key periods of the year, such as Mother’s day, Valentine’s Day or Christmas, digital gift cards generate more revenue than the rest of the year. Between those who are looking for a last minute gift, and others that pick the safest option because they are afraid to disappoint – or for the fact that people simply like receiving them – gift cards have it all to be the ultimate gift. And they keep this title until the very end since brands can use them to target last-minute shoppers, that way, they do not miss a single opportunity to maximize their revenue.

8: To open your business up to professional customers

With the help of e-gift cards, brands operating in B2C can very well open their business up to B2B. Take time to consider the number of incentive or rewards programs for employees… Works councils and businesses are constantly looking for new brands to add to their rewards catalog. Offering digital gift cards to professional customers is all the more interesting given the increasing importance of human resources and HR marketing.

9: To offer an omnichannel experience

For consumers, omnichannel has become the norm. The fact that they expect an omnichannel experience should be taken into account by brands. However, gift cards are often forgotten. It is a pity considering the fact that the digital version enables consumers to spend money on online or physical shops whenever they feel like it. And forgetting their card is never a problem since it is just a few clicks away on their smartphone.

10: To be part of a wider distribution network

Digital gift cards are a gateway to a wider distribution network. Many marketing agencies, retailers and distributors like or sell gift cards from different brands. As a result: each platform is yet another opportunity to increase brand awareness and revenue.

Digital gift cards can become quite an asset in a brand’s strategy. From customer acquisition to loyalty, they are a multi-faceted tool, a formidable weapon to stay ahead of the curve and draw in customers as well as consumers. Well, when would you like to get started?

Suggestions for further reading

Gift cards: a formidable marketing tool

Digital gift card white paper

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