Digital Gift Cards In 2016: Where Omni-Channel Strategy Meets Customer Expectations
Retail Systems Research analysts Nikki Baird and Steve Rowen evaluated the consumer-facing digital gifting experiences of 100 of the nation's top retailers, restaurants and airlines in a comprehensive study that details which brands are leading the way, which are falling short, and where there's opportunity for improvement. Leading organizations across these industry categories are featured in the study:
- Accessories / Footwear
- Computer / Electronics
- Department Stores
- General Merchandise
- Health & Beauty
- Home Goods / Furnishings
- Home Improvement
- Restaurants – Casual
- Restaurants – Quick Serve
- Specialty Retail
- Sporting Goods / Outdoors
Preview an excerpt of the study below:
Welcome To An Ongoing Revolution
We evaluate retailers’ digital gift card offerings every year. Why? Because they are something customers increasingly desire – and purchase – for an ever-growing number of occasions. Yet, despite this fact, most retailers have never really loved gift cards. They have, in the past, been viewed as difficult to manage, leverage, and prioritize. As a result, the baseline finding of this report is that retailers are ignoring far too many opportunities for digital gift cards. And in the year 2016, this is nothing short of a mistake.
Gift cards are here to stay, and digital gift cards are an increasingly important component of gifting. They help retailers engage consumers by sharing or participating in a recipient’s brand passion. They are easy and convenient in an era when more and more consumers connect with each other digitally first. And if managed properly, they offer retailers a tremendous opportunity for otherwise difficult-to-attain cross-sells, upsells, and increased basket sizes.
Which raises the question: are retailers leveraging digital gift cards to their full potential? And why then – and exactly how – are so many of them dropping the ball on their digital gift card offerings? This research seeks to answer these questions.
As in the past, RSR starts with a list of 100 retailers. They are collated from a combination of the Internet Retailer Top 100 and Nation’s Restaurant News. Non-pertinent candidates for gift cards are removed (1-800-Contacts.com, for example), and the remaining retailers are organized into categories (apparel, home goods, etc.). This year, we also added airlines. The list of brands evaluated is in Appendix A.
The criteria we use for evaluation evolve every year – just as retailers' capabilities (and needs) evolve. We focus on updating the criteria to highlight differentiating capabilities, rather than the features that have become industry standards. This year, that meant looking at digital gift cards more holistically – adding not only criteria about supporting omni-channel payment options and bulk purchases, but also a deeper investigation into loyalty programs as we attempted to buy a gift card from each retailer using loyalty points from major credit card providers. A list of the criteria and the rating scale we used in the evaluation are included in Appendix B.
The evaluation was conducted exactly as it has been in years past for consistency: one person purchased all of the gift cards and another person received them all. We made certain to use consumer-grade email addresses and ISPs, rather than sending gift cards to corporate servers. The purchases were conducted in the latter half of May through June 2016. An overview of the results for every retailer and category is also included in Appendix A.
For those retailers that do offer digital gift cards, our scale is comprised of 66 maximum possible total points from the following criteria. Below is just a sample of some of the criteria for both buyer and recipient experiences (a detailed breakdown of the criteria is listed in Appendix B):
- Easy to find on desktop
- Easy to find on mobile web & app
- Gifting prioritized as selling strategy
- Integrated digital & plastic purchase
- Purchase optimized for mobile
- Can buy gift cards with credit card loyalty points
- Support for bulk buying
- The Buyer Experience:
- Speediness of delivery
- Faceplates and personalization
- Choice of denominations
- Choice of delivery options
- Omni-channel payment options
- Loyalty and marketing program integration
- Notification options
- The Recipient Experience:
- Engaging reveal
- Ease of redemption
- Ability to thank the buyer
- Mobile wallet integration
- Reloadable gift cards
- Can manage eGift cards in a mobile app
- Time to receipt
And The Top Performers Are...
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