Gift cards: Making the most of the gift that keeps on giving

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2013Holiday_Blog_ShoporgOne-fifth of retailers we surveyed this summer noted that they were investing “significantly” in online gift card purchase and redemption this year. These investments have not gone unnoticed: last week, RSR and CashStar found that 69 out of 99 retailers they studied now offer online gift cards, up from 59 in 2011. RSR and CashStar also named brands such as Home Depot, Sephora and Starbucks as the retailers that offer the best online gift card programs.

Continued improvements in online gift card functionality and marketing are timely with holiday shopping really about to kick into high gear. Looking back to 2012, holiday shoppers spent a record $28.8 billion on gift cards, with three in five consumers saying gift cards were the gift that they most wanted to receive themselves.

This matches up with Shop.org’s research that consumer demand for gift cards is strong. In the Shop.org eHoliday 2012 Post-Holiday study, we found that:60percent-consumer-giftcards

  • Three out of five (62 percent) of U.S. consumers bought at least one gift card during the holiday season, both in-store and online
  • Of those gift card buyers, almost two-thirds (63 percent) bought specific store cards, while another third bought restaurant gift cards

Among online gift card buyers specifically, two out of five:

  • Spent an average of between $25 and $49 per card (41 percent)
  • Spent between $50 and $100 for gift cards that they bought online (45 percent)
  • Had the physical gift card mailed to themselves (39 percent)

Although there is little time left before holiday shopping starts in earnest, retailers can still ensure that they’re making the most of their online gift card program:

Optimize the process to purchase – and redeem – gift cards online. Complex purchase paths for gift cards will cause consumers to abandon ship quickly. Streamline the selection and checkout processes everywhere online: consolidate forms, analyze the feasibility of using social media sign-in, and balance the presentation of personalization and delivery options to avoid overwhelming customers with choices. Test the gift card purchase process on mobile devices to allow for “fat fingers” and ensure legibility on a variety of screen sizes. It’s paramount that redeeming an online gift card is easy for the recipient.

Mobile is a prime spot to market gift cards. As consumers spend over half their time on retail sites via smartphones and tablet, mobile platforms are key for online gift cards. Last year, Northern Tool and Equipment Co. showed a banner on its mobile site that rotated its gift card offers. This is one impressive way retailer apps should include the ability to buy gift cards.

Market gift cards well. In the RSR/CashStar study mentioned above, Home Depot earned acclaim for marketing gift cards prominently, including at the top of the home page and close to the shopping cart icon. Sound obvious? See if you can find “gift card” in the “obvious” places on your favorite retailer websites. Email marketing, search and social media are other places to weave in messages about online gift cards.

Market options for personalization and delivery. Although many online gift card purchasers had the physical card mailed to themselves – presumably to give in person to the recipient – last year, some consumers are beginning to opt for other delivery methods. While the numbers are still small, the data in our Holiday Strategy and Planning Guide shows millennials who bought online gift cards were least likely to have the card mailed to themselves. Instead, they were more likely to have the card mailed to the recipient, send it electronically, use the print-at-home feature or post to the recipient’s Facebook wall. Millennials were also more likely to personalize online gift cards with a photo or an audio or video clip.

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