Amazon Takes Top Spot in Merchant Gift Card Rankings

For the second consecutive year, Amazon.com topped the rankings for overall best score in a ranking of merchants’ e-commerce gift card programs. The report, 2018 Merchant Gift Card E-Commerce Evaluation, was produced by digital gift card solutions provider CashStar, in partnership with NAPCO Research (NAPCO Research and Total Retail both are brands of parent company NAPCO Media). The cross-platform assessment evaluated 100 leading brands on more than 100 unique criteria, including the online consumer purchase and recipient experience of both digital and physical cards (e.g., payment and delivery options, ease of discoverability); business-to-business (B-to-B) e-commerce offerings; personalization options; and the use of gift cards for marketing initiatives.

Amazon received 79 percent of the total possible points across all criteria, ahead of second-place finisher, Sephora (75 percent). Rounding out the top five were Williams-Sonoma (74 percent), Bed Bath & Beyond (69 percent), and Best Buy (67 percent). In addition to Amazon, which repeated its first-place ranking, both Sephora and Best Buy appear in the top five for the second straight year.

While this may seem to be another case of Amazon, the clear e-commerce market leader, outperforming the rest of the industry, that isn't necessarily the case. Amazon hasn't clearly separated itself from the pack when it comes to its e-commerce gift card program. In fact, Amazon and the other brands at the top of this year’s rankings have room for improvement in their gift card programs. However, as evidenced by the overall average score of 44 percent for the 100 retailers evaluated, there's a significant gap between the top-scoring merchants and the rest of the field. While the average score off 44 percent is a slight improvement over last year’s average of 42 percent, there are clearly many areas in which the brands’ gift card programs can be improved.

Primary Customer Journey is a Bright Spot for Retailers’ Gift Card Programs

The primary customer journey — i.e., desktop purchase of digital and physical cards, with digital gift cards accessed by recipients via desktop or mobile — was proven to be a strength for the retailers evaluated. The top primary customer journey performers scored 80 percent or higher on a set of criteria that was designed to assess important capabilities, including personalization, payment options and recipient experience.

However, with the primary customer journey continuing to shift to mobile purchases, brands appear unready for this new reality. While improvement was seen from last year’s mobile performance, both for mobile website and mobile app, we still see a significant gap here when compared to the average desktop purchase experience. What is encouraging for merchants is that this gap has closed significantly in the space of a year, from 14 percentage points in 2017 to just 6 percentage points this year.

Areas Identified for Improvement

As part of the evaluation process, areas in which retailers struggled were identified. Here are some of the common themes that emerged from the 100 brands’ e-commerce gift card programs:

• Discoverability and lack of program information: Merchants need to do a better job of making their gift cards easily accessible across each of their channels. This includes not only the homepage, but site search results as well. Not all consumers are going to arrive on your site via the same path, so site search should proactively account for “gift card” searches. Nearly half of the merchants (45) received 50 percent or less of the available points for discoverability. In addition to making gift cards easy to find, brands need to do a better job of explaining to site visitors the process for buying and sending a gift card, as well as the benefits of doing so. Don’t make the customer have to search far and wide for this information, and make it easy for a potential purchaser to understand.
• Post-purchase experience: The customer experience extends beyond the purchase to order fulfillment and delivery, whether the gift card is being sent to the buyer or a recipient. In addition, customers expect a consistent brand experience throughout the entire process. Too often the merchants evaluated failed to deliver on those expectations. The average score for the merchants in this criteria was 57 percent, but nearly half (47) of the evaluated merchants failed to reach that average score.
• Poor customer experience: Merchants should treat gift cards as they would any other revenue-producing product and optimize the buying experience. Poor customer experience not only puts current revenue at risk from the loss of immediate sales, but it also potentially negatively impacts future earnings as well from customers that may decide not to come back to your site again.
• Data security: Considering the well-publicized data breaches and other cybersecurity issues that have impacted the retail industry, it was somewhat surprising to see the number of instances in which sensitive personal information and other valuable data wasn’t handled with the utmost concern for security.
• False positives: There was an increase this year in the number of orders declined due to them being flagged as potentially fraudulent. False declines negatively impact a customer’s experience, which has a direct correlation to sales.

Tips to Improve Your E-Commerce Gift Card Program

The report offered several steps that brands can take to improve the performance of their e-commerce gift card programs. Here's a sampling of those tips:

1. Place an emphasis on the omnichannel experience for gift card buyers, with a particular focus on mobile.
2. Cater to self-buyers, a growing segment of consumers, by making it quicker and easier for customers to purchase gift cards for themselves.
3. Don't forget about B-to-B. Promoting the sale of gift cards in bulk to other businesses is not something all merchants are doing, and for those merchants, there’s market share to gain here.
4. Use gift cards as a promotional tool. Capitalize on the tremendous consumer appeal gift cards have by making them more than just a sales channel (e.g., as incentives to drive specific behaviors in marketing campaigns).

Make sure to access the full report, 2018 Merchant Gift Card E-Commerce Evaluation, which includes all of the rankings (including broken down by product category) as well as more valuable trends and tips gleaned from the data.