Case Study: Digital Gift Cards Produce Increased Sales for Home Depot
PROBLEM: Home Depot sought to increase sales of its gift cards.
SOLUTION: Contracted with a digital gift card company to upgrade its gift card program.
RESULTS: Since launching its digital gift card program in October 2009, Home Depot has realized increased sales and a higher customer retention rate from the channel.
Home Depot prides itself in being an innovative company that's always at the forefront of new technologies. The brand's use of digital gift cards speaks to that culture of innovation. Digital gift cards started appearing in the marketplace in late 2008. At that time Home Depot offered only plastic gift cards, available for purchase in its stores and through third parties such as grocery stores and drug stores. The cards were also available to consumers through B-to-B partners such as American Express.
Realizing that e-commerce was a growth channel and digital gift cards were a better solution — they're easier to transport and send vs. plastic gift cards — Home Depot quickly acted on this opportunity. After researching the marketplace for a digital gift card vendor, Home Depot chose CashStar in early 2009. Nine months later Home Depot went live with its digital gift card program.
"When CashStar's e-gift cards came along, we took what we thought was a very good program and made it better," says Spencer Allen, director of incentives at Home Depot. "We take new ideas beyond what was initially in scope."
Speed Extends Selling Seasons
The speed in which digital gift cards can be delivered has enabled Home Depot to extend the selling season around the holidays. Consumers no longer have to worry about meeting a shipping deadline to send gift cards. Instead, e-gift cards can be bought and sent no matter the date or time. With gift cards the No. 1 most requested gift at Home Depot, that equates to a lot of sales that might not otherwise have happened.