[Infographic] Are Competitors Cannibalizing Gift Card Sales?
When it comes to gift card sales, the third party business plays a big part in the gift card industry. It offers huge buying potential for retailers and merchants when it comes to brand exposure. You’re able to get your gift cards in front of people who may not go into their stores and also makes the choice for a last minute gift even easier. Another important concept, just because your brand isn’t in the third party market doesn’t mean your competitors aren’t. The benefits of third-party gift card programs include increasing brand exposure, revenue, and customers. Selling your gift cards in a gift card mall can increase your distribution network by thousands of locations. If your gift cards are not currently in a third-party program you are losing valuable sales and customers that may be buying from your competitors who are already active in third-party programs.
High Risk Consumer Touch Points and Demographics
Consumer touch points can be risky for retailers. Customers are gained and lost when high-risk touch points are not taken advantage of and can result in negative consumer experiences.
LoyaltyOne's new study shows that high risk touch points get even riskier with certain demographic segments. One such example are return policies, they can be some of the most sensitive interactions brands face with consumers. While a smooth return policy, especially for gifts, may seem like smooth sailing internally, it can make or break customer relationships. For consumers coming in to return a gift, retailers have the opportunity to acquire a new customer that may have never known about the brand. The opportunity here allows brands to build a relationship with a new consumer and create a lifelong revenue stream. At the same time brands have the opportunity to turn someone away who wasn't a customer and now will never be. Closing a consumer off to your brand forever because they had no loyalty to begin with and were met with a bad first experience. This high-risk high-reward interaction should be strongly considered for your business before being implemented, given the high stakes. Many retailers focus on female demographics as they tend to be the heaviest shoppers. However, in this case it’s really the men retailers need to worry about. According to the
LoyaltyOne survey:
High Risk Consumer Touch Points and Demographics.
High risk consumer touch points can be risky for retailers. Customers are gained and lost when high risk touch points are not taken advantage of and result in negative consumer experiences. What LoyaltyOne's new study shows is that high risk touch-points get even higher risk when certain demographic segments are at greater risk for negative brand interactions.
eGift Cards Show “No Sign of Slowing Down”
“The most popular gift on the planet…the gift card”, says the NECN Business video story on CashStar. Nice video story about the rise in eGift cards. More and more companies are gifting these cards as incentives in their company rewards programs, like sales incentives, health and wellness rewards, and for increasing workplace safety. The B2B gift card marketplace is indeed growing with the help of innovations from companies like CashStar.
Retailers & Merchants: Gift Cards Can Lower Operating Costs
Since gift cards are given as gifts, incentives and employee rewards, they are often thought of by retailers and merchants as a customer acquisition tool. Let’s say a customer doesn’t shop at a particular retailer or merchant often or at all. Yet a family member, friend or employer gives a particular brand based on it meshing well with the recipients’ needs. This gift card now becomes a new customer acquisition tool or a customer loyalty tool for the retailer. BUT, are retailers also thinking of their own gift cards as a tool to lower operating costs? When your customers use debit and credit cards for their purchases, the burden of the transaction fees falls on that retailer. There are no fees when your customers utilize their closed-loop gift cards in your own name. The impressive numbers add up when you think of the difference your gift cards can make when selling them by the hundreds and thousands in the B2B market. GiftCard Partners’s customers buy multi-millions of dollars in face value gift cards annually across all our retail brands. Those are all consumers using your gift cards versus credit or debit payment card options that rack up fees charged to you. Check out
First Data’s Perspective: The Evolution of Gift Card Strategy to see how retailers and merchants are re-evaluating their cost of payment acceptance at their POS locations.
