Why building a gift card option is essential for ecommerce

Gift cards possess huge potential for merchants who want to increase revenue, acquire new customers and get their brand noticed.

It’s generally believed that a gift card program is a marketing tool perfect only for the biggest holiday season or that it can be applied merely by big brands. However, gift cards can be a great tool to drive customers and increase sales, regardless of the season or the brand size.

According to the National Retail Federation 2014 survey, 60% (or 6 in 10) of shoppers say they would rather receive a gift card than anything else.

That’s why I wrote this post. I’ll cover the most interesting gifting facts and stats and will lay the foundation of an effective gift card program: your golden ticket to selling more.

Why gift cards see strong performance all year round

According to the Retail Gift Card Association 2015 research 70% of shoppers plan to buy gift cards during the spring-summer gift season. The most popular occasions at this time are birthdays, graduations, Father’s Day, and weddings.

Here’s more:

  • 81% of shoppers prefer to buy a gift card for a birthday, making it the number one gift-giving occasion.
  • 38% of adults reported to give a gift card as a graduation.
  • The most popular gift wish for the Father’s Day 2015 is a gift card (32,1%). In contrast, only 24,7% of moms wish to get a gift card for the Mother’s Day, putting above homemade stuff, greeting cards and dinner.
  • 12% of shoppers will buy gift cards as a wedding present.

The practice of giving gift cards for various occasions is on the rise. By offering unique gift cards for specific purposes, you double your chances to drive more customers to your store and increase overall spending.

The rising popularity of e-gift cards

This year, digital gift cards have reached the peak of their popularity.

Compared to 2013, shoppers are increasingly choosing to go online to get gift cards. The purchase of e-gift cards increased substantially from 26% in 2013 to 34% in 2014. Purchases of gift cards using social channels such as Facebook increased from 8% in 2013 to 13% in 2014.

What’s more, consider the following…

  • 80% of top retailers sell gift cards online
  • Digital gift cards experience annual growth of 200%.
  • Nearly 70% of shoppers agree that they’re more interested in purchasing e-gift cards now than they were 2 or 3 years ago.
  • 20% of those who have purchased at least one gift card from an ecommerce store responded that they buy 5-7 digital cards annually.

To reach digital-savvy consumers, you need to diversify your gifting options and go beyond traditional forms.

A number of merchants noted that multiple card designs and features increased their gift card sales. Hence, when you put personalization in first place and offer variety, that’s when you amplify card sales and brand awareness.

The benefits of a well-run gift card program

E-gift cards themselves are benefits. With traditional plastic cards, merchants generally don’t know any information about the gift card holders. With digital cards, the retailer has shoppers e-mail address or a phone number, so she can remind a customer who hasn’t redeemed value of the card or make special offers for those who redeemed the cards.

Gift cards are an effective way to:

  • Increase sales: When shoppers purchase gift cards, they don’t stop at one. 70% of customers spend more than the value of the card. The average gift card user spends an extra 20% beyond the value of the card.
  • Attract new customers: Gift cards encourage people who might not otherwise visit your ecommerce store to take a look around and likely return to make additional purchases. In the U.S, 41% of customers tried a new store or place because they received a gift card for that business.
  • Enhance brand awareness: Branded with your company name, logo or design, gift cards become a great source of advertising and recognition. As people often buy gift cards for their friends, your brand continues to be dispersed among new customers.
  • Complement retention efforts: 72% of customers who tried a business for the first time because they received a gift card returned to that business.

How to build a killer gift card program

Like any other product (or service) you sell, gift cards also require a thoughtful marketing effort. Here’re several tips you can use to build an effective gift card program:

  • Consumers are drawn to appealing design, so align your card design with your brand and consider designs for special occasions (Birthdays, Christmas, Baby Shower, etc.)
  • Cross-sell your products. When customers spend over a certain amount in your store, you can offer a gift card as a reward. You can also motivate customers to buy certain products — “Buy this item and receive a gift card for free”.
  • Launch in-store promotions. Gift cards make useful prizes for store events and promotions.
  • Take advantage of peak shopping dates.

The bottom line

Gift card programs bring a lot of benefits to ecommerce storeowners. They attract new customers, drive revenue and build brand awareness, so it’s not a surprise that more and more merchants try to implement well-thought gifting programs. In order to maximize the success of such programs, storeowners should continue evolving and innovating gifting efficacy to keep up with consumer trends and new technologies.

Natalie Pavlovskaya (@tenlerlenin) is a digital marketer and content strategist at MageWorx. She is here to write cool stuff about all things ecommerce and social. More articles by Natalie Pavlovskaya
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