Most look forward to spring and summer for relaxation, freedom and fun in the sun. For retailers, it means a mad rush to provide compelling gift ideas for the slew of holidays and milestones packed into the warm months. In 2017, spending was estimated to reach a combined record-high of $44.7 billion for Mother’s Day, Father’s Day, and graduation per the National Retail Federation (NRF) with 2018 likely to continue the trend.
As consumers begin the hunt for perfect gifts, the pressure is on for retailers to get extra creative in their strategies. Digitizing gift card offerings can be the key to gaining an edge up on the competition. If you haven’t gone digital yet, here are four reasons to make the move today.
Stand Out in the Marketplace
Since consumers have a wide variety of gift options, it is important that retailers offer incentives to attract sales. A great way to stand out is to implement unique digital gifting offerings that create great deals for consumers. Digital flash sales and product/service subscriptions continue to be a fun way to engage consumers who are continually trying to find a great deal. These offerings are often seasonal favorites for many retailers as they’re easy to customize, build a ton of buzz and increase sales. Both tactics are particularly useful as they often lead to consumers purchasing even more in store.
To stay as fresh as possible, stores should tailor their offerings to recent shopping trends. Specifically, there has been an uptick in the demand for experiential gifts rather than material gifts. Consumers are consistently drawn towards experiences such as a night out or class that shake up the gift giving experience.
Avoid Gift Returns
During this time of year, consumers urgently purchase gifts simply to have something to give their mom, dad, or grad. But too often those gifts are returned, ultimately leaving retailers empty-handed. While these purchases may seem like an initial profit, retailers ultimately receive $351 billion worth of totals returns each year, according to NRF.
To avoid the pitfall and discrepancy caused between purchases and gift returns, merchants should push the availability of digital gift cards, which ensure that all consumers can choose the gift they want. According to our annual Prepaid Consumer Insights Study, consumers, and especially millennials, are continuing to embrace the value of gift cards at a record rate.
Digital Drives Spending
It’s no surprise that consumers are looking to make the majority of their gift purchases online. We found that digital gift card use is on the rise with the average number of digital gift cards purchased jumping to 6.1 per customer, compared to only 4.0 in previous years.
Driving consumers to your website or in-store via digital gift cards will encourage consumers to spend beyond the initial gift card amount. Our Prepaid Consumer Insights Study also found that 75% of consumers shopping with a gift card overspend by an average of $38 beyond the gift card’s original value. Retailers should take advantage of this trend by advertising their gift card programs more heavily during the spring and the upcoming summer season.
By eliminating the hassle associated with carrying traditional gift cards, consumers can store, reload and use digital gift cards straight from a mobile app like Gyft. Simplifying the gift card management and redemption experience will make the purchasing process much easier for consumers as more than half of those surveyed indicated an interest in storing digital gift cards on an app.
What’s more, implementing a gift card program is much more flexible than many retailers assume. Retailers have the option to sell their own custom-branded digital gift cards in time to cash in on the spring and summer rush. By joining in on the movement now, stores can also be prepared with a strong digital gift card offering by the time the winter holiday season rolls around.
Increase Consumer Loyalty
With all brick-and-mortar and ecommerce businesses vying for consumers, continuously marketing your offerings is essential. Ease of purchase and great value create loyalty, but engaging with consumers through mobile devices can help strengthen their loyalty and encourage repeat purchases. Across all demographics, 78% of consumers are at least somewhat interested in receiving push email or text notifications about their gift card balances and special offers.
The moral of the story is if you haven’t gone digital yet, you may be missing out. If you begin the transition now, you’ll have more to offer and be ready to capitalize on what should be record-breaking spending season.
Euphemia Erikson is Vice President and Head of Product Marketing at First Data