Caleb Andrew's blog : Gift Card Market Growth: Digital Gift Cards Aid Brand Sales And Customer Loyalty

Increasing Use Of Digital Gift Cards

Digital gift cards have become a major component for the majority of retail stores. Previously, physical gift cards were the only gift card option available, but with the rise of online shopping, the gift card industry has evolved to accommodate virtual cards.

Digital gift cards are becoming more popular in retail stores. Decathlon, and Ikea in France have recently started to utilize digital gift cards in their stores. Of course, there is still a lot of unexploited potential when it comes to digital gift cards.

Looked at from a different perspective, the numbers tell a story of their own. Analysing the Gift Card Market, GMI Research projects the sector to reach USD 2,747.8 billion by 2030. This magnitude of growth demonstrates the sheer impact that digital gifting has provided retailers and online platforms alike.

Understanding Digital Gift Cards

Digital gift cards are online versions of normal plastic gift cards, and they are just as easy to use. Purchase a plastic gift card and wait for it to be shipped? No thanks. E-gift cards are sent to recipients by email almost instantly. Generally, the card arrives as a digital code, or a meant to be printed PDF voucher. Cards can be easily accessed and redeemed from a recipient’s phone, tablet or computer.

Digital gift cards can also be personalized with messages, and they are easily adaptable across any digital platform which makes them even more versatile and easy to use. These are all of the practical reasons these gift cards appeal to both the recipients and the gift givers.

These gift cards also help brands increase revenue. There is no waiting for a purchase to be made, a gift card essentially guarantees a future transaction. When a gift card is sold the business secures the revenue on a transaction before it is done.

That's only part of the problem. Many customers redeem cards for more than the card's original value. A customer may have a $50 gift card, but the final purchase usually exceeds that amount.

And with impulse buying, gift card holders browse items that they normally wouldn't consider. This type of behavior provides additional sales opportunities.

Standing Out in a Crowded Marketing World

The digital marketplace has tons of ad placements. Promotions are visible almost everywhere. At the same time, attention spans are decreasing significantly.

Brands have to compete using discount codes and promotional coupons. These tools have been used so often that shoppers are no longer excited by the prospect of a discount.

Digital gift cards change this narrative. Instead of feeling like a promotional gimmick, they feel like a reward or a thoughtful gift. This type of difference allows brands to earn the attention of customers.

Acquiring New Customers

An interesting phenomenon occurs with gift card sales. Many of the customers visiting the brand's website for the first time are buying gift cards.

When people buy presents for their partner or friend, they may know what stores they like, but what specific product is a mystery. In cases like these, gift cards are a perfect option.

Instead of trying to guess what product to buy, they purchase gift cards. In these cases, the brand gets a new customer who probably wouldn’t have bought a product otherwise.

Encouraging Customer Loyalty

Most brands have a loyalty program. Some benefit from having paid memberships while others offer a loyalty program for free.

Most of these programs are the same. Customers earn points to get discounts or a free item.

With loyalty programs, people can be rewarded with gift cards. This can be a motivation to stay engaged with the brand.

Creating Another Customer Touchpoint

One underrated benefit of digital gift cards is visibility. Once someone receives a gift card, it usually stays in their email inbox or smartphone wallet.

Even if the recipient hasn’t heard of the brand before, the gift card will introduce them to it, while also remaining present to the recipient until they choose to redeem the card. In this sense, the sender of the card also becomes an ambassador for the brand.

Tracking Customer Behavior

Digital gift cards help brands understand more about customer behavior, and the data becomes more useful every time the gift card gets redeemed.

Brands gather data about the dollar amount spent, the date of the purchase, and whether the customer spent over the value of the gift card. Additionally, brands can see data about which items were selected.

When digital gift cards serve as an email marketing tool, brands can measure the success of the email campaign which ultimately improves the bottom line of the marketing efforts.

Possibilities in the B2B Sector

Digital gift cards also open opportunities for businesses and organizations. Companies also run employee reward programs and incentive programs.

These companies regularly seek out new brands for their rewards catalogs. By integrating digital gift cards into their offerings, retail brands can access the B2B market and reach business buyers in addition to consumer buyers.

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