Ask the Expert: Make gift cards work for you


Last year shoppers spent £4 billion on them; could they work for you?

Getting involved with a gift card scheme can offer retailers extra revenue and marketing opportunities. Germain Roesch, executive vice-president of Ceridian Store Value Solutions International explains how it works and why it’s important.

Gift cards represent such valuable marketing and revenue potential for retailers that all brands – both independent and large chains – ignore them at their own peril.

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In terms of revenue alone, the statistics are impressive. According to the UK Gift Card and Voucher Association (UKGCVA), in 2010 UK shoppers spent £4 billion on gift cards and store vouchers.

But it’s not just their popularity that is growing. The British Retail Consortium reports an increase of nearly 18% in gift card sales in the second quarter of 2011, in stark contrast to overall retail sales growth of just 0.8% for the same quarter.

A survey conducted by the UKGCVA last year showed a significant proportion of the UK’s total population (38%) bought a voucher or gift card between March and June 2010.

Gift cards are popular among consumers for a variety of reasons. Recipients enjoy the opportunity to choose the products they really want. Many shoppers report that they see gift cards as free money and more than 80% say they buy products that are more expensive when using a gift card than they would with cash alone. In addition, most consumers spend more than the face value of the card – what we refer to as lift – which is on average 70% to 90% more.

The benefits of gift card programmes are not confined to the opportunities for increased sales and revenue. Savvy retailers are also able to exploit a range of marketing strategies, including promotional cards, loyalty programmes and incremental B2B sales, often used for employee incentive schemes.

Retailers can market a particular brand, product or service with card designs that target a specific area. Loyalty programmes, for example, can even track purchases and make real-time offers based on a customer’s shopping patterns.

Gift cards represent the future of shopping. One of the fastest growing trends for UK retailers is the shift from paper gift vouchers to the more durable, creative and secure plastic gift cards. Another rapidly evolving trend is the sale of gift cards through third-party gift card mall displays, seen in non-traditional retail locations such as supermarkets. Such outlets present a great opportunity for smaller or independent brands to sell their cards further afield than in their own stores or websites.

Gift cards also answer the call of the modern 21st century shopper. Not only can gift card programmes operate with a physical plastic card loaded with a predetermined amount, but they can also operate online, through social media sites such as Twitter, which sells retailer gift cards through Twitpay, and electronically, allowing consumers to redeem their gift cards via email or mobile technology such as a smart phone.

Brand recognition is enhanced both by the use of merchandising and by the gift cards themselves, which are effectively walking billboards. For every gift card sold, retailers receive an average of at least 10 brand impressions. It is worth considering what would you pay in advertising costs for that many individual impressions.

This article is from the December issue of Professional Jeweller. To read this article and others in full online, click here.


Tags : ask the expertconsumer spendinggift cardsgift vouchersjewellery retailshopping
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