The Rise of Digital Gift Cards
As digital and e-vouchers registered impressive growth in 2017, Jon Dixon, head of gifting, looks at how the emergence of digital issuance is not only shaping the gifting industry, it’s helping to attract new customers to using gift cards.
By their nature, gift cards offer choice. Choice of what to spend them on, and to a lesser extent, when to spend them, and how. Gift cards allow employers the ability to motivate, reward or engage a wide range of people and demographics with one mechanic. But there was always a restricting factor, whether it be awaiting postal delivery of the card, or which channels they could be spent on. Whilst suitable for most occasions, the development of digital gifting has seen these constraints diminish, propelling gift cards back to prominence for businesses looking to reward or incentivise.
The introduction of digital gift cards has been very well received by our clients at Argos, with businesses from a range of market sectors eager to start to use them as part of their strategy. And we aren’t alone in this uptake. According to a recent report from the UKGCVA, digital and e-vouchers have shown an impressive growth rate amongst their members of 72.21% in the second half of 2017, building a 9.49% share of the gift card market during the same period.
Meeting customer expectations
Whilst the change to digital issuance has opened up a much quicker start to the journey of getting products into recipient’s hands, I don’t think it’s just the issuance of the gift card which is driving popularity. It goes hand-in-hand with how easy they are to spend. Today’s audience for gift cards are as likely to want to spend their gift cards the same day – driven by the conditioning of enhanced and new delivery methods we’re all able to access now. Whether it be next day delivery options, or Argos’ same day Fast Track Delivery or Collection, we’re all used to not having to wait too long to get our hands on that shiny new item. And this is where digital gift cards complete the chain and offer incentives a real-time impact. And as many gift cards are used as a reward mechanism, what better than to create an experience of instant gratification. The recipient is happy, the business rewards in a timely manner, and both parties are ready for the next challenge. With the reward still fresh in the mind to drive continued engagement and energy.
Attracting new customers
What we’re seeing from initial data insight is that Argos eGift Cards are attracting a new audience to gift cards. One of our larger rewards and benefits partners has seen a definite shift in customer up take of our new Argos eGift Card. 84% of digital sales since launch have been by customers new to Argos gift cards - customers who hadn’t previously bought a physical Argos Gift Card via this partner. This for me is crucial in demonstrating that a change to the customer journey can help brands talk directly to a different audience. And critically in a competitive environment, engage new customers. The reason for this attraction to a different audience is the functionality, in both issuance and redemption as a combined proposition. It’s about speed of issuance, and in a format that these new customers are using in the rest of their lives. On the go, and at speed.
For businesses considering reward or acquisition schemes, the introduction and growth of digital issuance affords much more choice in their ability to talk to different audiences who may have been turned off by the physical option. Whether used for employee rewards, prizes, sales incentives or motivation to help change behaviour, being able to receive a gift card digitally, spend it online instantly, on a choice of products, then collect it on your way home from work (or have it delivered the same day) is a game changer in instant gratification. If I think back to the days of allowing 28 days for delivery, it’s easy to see how digital gifting is shaping the industry at the moment.