Boost Gift Card Sales With Focus on Personalization, B-to-B
As part of the 2020 Merchant Gift Card Omnichannel Evaluation, NAPCO Research, in conjunction with Blackhawk Network, conducted a comprehensive analysis of 100 leading merchants' gift card programs. The evaluations consisted of a thorough assessment of the consumer gift card purchase and recipient experience across multiple channels, including in-store, desktop e-commerce site, mobile website, and mobile app (if applicable). In part one of this article series, I identified the top performing merchants, as well as addressed some of the key overall data points to emerge (e.g., average scoring across each of the four channels evaluated).
In part two of this series, I will address two trends to emerge from the data — namely, merchants' slow adoption of personalization tactics within their gift card programs, both for purchasers and recipients, as well as the (largely) untapped B-to-B gift card market.
Personalization Can Help Improve Gift Card Purchaser, Recipient Experience
Consumers have come to expect personalized shopping experiences. This extends from marketing and customer service to product and order delivery/fulfillment. For gift cards, giving the gift card purchaser the option to include a personalized message for the recipient is becoming an expectation. However, many merchants have yet to fully optimize this component of their omnichannel gift card program.
When measured for advanced personalization tactics, such as the ability to add a photo or video to a digital card, the merchants left plenty of room for improvement. Across the 100 merchants, the average score for advanced personalization of a digital card on a desktop site was 27 percent, which was better than mobile website (23 percent) and mobile app (13 percent) for the same category, but was a low bar to clear.
The personalization challenges extended to physical gift cards as well, as just 1 percent of the available points was earned, on average, for advanced personalization of a physical card on a desktop site. The same score applied to advanced personalization of a physical card on a mobile site, while none of the merchants evaluated earned points in this criteria category for their mobile app.
Furthermore, personalization options should be extended to in-store gift card buyers as well. There are opportunities to differentiate your in-store gift card purchase experience beyond just having a neat, well-stocked checkstand or fixture. For example, fewer than half of the merchants evaluated (41 percent) offered a gift-wrapping option (bow, envelope, ribbon, wrapping paper, etc.) upon the purchase of a gift card. Therefore, the merchants that do provide this type of added, personalized service are more likely to be remembered by consumers when it comes time to make their next gift card purchase.
Consider the benefit that personalizing the gift card purchase and recipient experience can have on creating relationships with customers, which can lead to long-term loyalty.
Tap Into the B-to-B Gift Card Market
Most merchants are optimizing their omnichannel gift card programs for consumers, which makes sense. The gift card market in the U.S. is projected to record a CAGR of 9.2 percent during 2020-2024, growing to $ 221,147 million by 2024. However, many merchants are missing out on a significant piece of that market by not selling their gift cards to B-to-B buyers. Consider the size of the B-to-B gift card market in the U.S., which is estimated to be $29.7 billion by Mercator, and you recognize the opportunity at hand.
The assessment measured merchants on four components of their B-to-B gift card program:
- how easy it is to obtain information about how the corporate gift card program works;
- how easy is it to sign up for the corporate gift card program;
- how easy is it to fi nd corporate gift cards on the merchant’s e-commerce site; and
- does the merchant’s B-to-B program offer both physical and digital gift cards.
The average score for the 100 merchants across each of the four criteria was below 50 percent. They were 49 percent, 48 percent, 47 percent, and 49 percent, respectively, indicating a market opportunity for the merchants that can successfully cater to the B-to-B gift card buyer. Here’s an example (Figure 10) of a merchant not giving equal treatment to its B-to-B program, burying the link to purchase gift cards in bulk in the page footer along with FAQs and Terms & Conditions.
Merchants should examine if they’re targeting B-to-B customers with their omnichannel gift card program, and if not, why. This includes making B-to-B gift card programs easily discoverable across all channels, as well as offering reasons why a business would want to purchase gift cards in bulk
(e.g., reward loyal customers), the potential value in purchasing in bulk (e.g., special pricing with
a corporate account, personalization options), and how to set up a corporate account. There’s a potential revenue opportunity that merchants are missing out on; don't let your business make the same mistake.
In the third and final article on the 2020 Merchant Gift Card Omnichannel Evaluation report, I will offer actionable tips/key takeaways for retailers on how can they improve the performance of their omnichannel gift card programs. In the meantime, you can download the full report, which includes the rankings of all 100 merchants (including broken down by product category) as well as more valuable trends and tips gleaned from the data, here.
Related story: 2020 Merchant Gift Card Omnichannel Evaluation
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.