The Gift Card’s Role in an Expanding Omnichannel Universe
Retailers large and small are looking to integrate the expanding channels through which they interact with consumers, from store to phone to tablet to computer, and back to the store. Whether we’re looking at mega-retailers like Wal-Mart and Home Depot or the modestly sized U.K.-based noodle shop chain Wagamama, the push is toward connecting a very disparate set of back-end functions, making them look and feel consistent when viewed from the front end.
We're by now familiar with the omnichannel mantra that consumers need to have access any time and in any medium they desire. Within this broad spectrum are the ability to order online with in-store pickup, or purchase in-store with delivery to your home; purchase and send physical gift cards; deliver online gift cards to a mobile device or computer; or even have phone interactions that support the consumer with linkages to external services and resources.
For example, chains such as Home Depot not only have online inventory status for each of its stores and an easy, mobile-enabled self-checkout system, but you can connect in-store to its network of contractors and installers to get that fence or deck built professionally. Wal-Mart, in essence, runs its own financial services enterprise to benefit its customers. While these are all vastly different functions, the user’s brand experience must be seamless, disguising those differences and the varying levels of complexity that are involved to swiftly get the customer from click to completion.
Take Wagamama as another example. It’s a successful and well-rated restaurant chain, started 20 years ago in London, and now it has a meaningful, albeit small worldwide presence. It serves really good noodles in several Asian spice-scapes, with fast and cheerful delivery.
Go to Wagamama’s website and you’ll learn it's been practicing Kaizen at the management level since 1992, to continuously improve its service and offerings. You’ll also notice that the art and science of Kaizen permeates Wagamama's website. While you’ll see that the very first button on its top bar, whether on the U.K. or U.S. site, says “Gift Cards,” there’s a punctuated simplicity to how the customer transacts, whether on mobile, tablet or laptop.
Focusing for a moment on the gift card feature, you’ll note that this is no tacked-on afterthought, but has been organically built in as part of a unified set of online options. Like piano keys, each one plays a different note, but the user doesn’t have to perform a different action to achieve that different note. As you scroll down, observe the life cycle of possibilities from “sign up” to “click and collect” to “order take-out,” where partnerships with diningin.com or foodler.com speed the delivery to your door.
You can buy a Wagamama gift card for “food, drink and gifts from any UK Wagamama restaurant” for any amount from £5 to £500, “and add a personalized greeting.” If you’re dining in the restaurant, while you’re waiting for your meal to arrive the server blithely advises you to check out the card on your paper placemat that describes Wagamama's mobile app, which allows you to pay with your smartphone.
And as mentioned, Wagamama's gift card offering is uppermost in its online presentation. Clearly, many people in the U.K. — and now in the U.S. and 15 other countries worldwide — love noodles. And this chain has been smart enough to dish them up in many modes of outreach, so that by the time the virtual meets the real noodle, the customer — or their lucky gift card recipient — isn’t disappointed. And while delivery is offered in so many options, it all originates with a click at the front end, which belies how different the functions are on the back end.
Gift Cards Go Virtual: How Can This Inform Multichannel Integration?
There are increasingly compelling reasons for retailers to get all the functionalities into mobile right from the start, and not make it feel retrofitted, with mobile as an afterthought. This includes gift cards. Those reasons carry both business and technology imperatives. From the business side, more and more consumers are doing their shopping on mobile devices. From the tech point of view, this consistency of intention informs the way web pages are designed today, starting with the mobile format and expanding out from there to larger formats.
While many successful retailers like Wagamama are reaping the benefits inherent in offering gift cards, most aren’t aware of how gift cards can be used to create the seamless multichannel integration they’re all racing to achieve. When offered online and via mobile, gift cards are a microcosm of the total offering that can show merchants how to streamline and smooth out their customer processes, from payments to gift giving.
Stored Value Solutions recently conducted a consumer-based study to determine what customers want and don't want in digital offerings. As you might imagine, many of our findings separated along generational lines: younger consumers are more tech-savvy and more demanding about pricing and timing, while older shoppers display more suspicion of technology and look for value in the offering. That said, listening to 1,000 U.S. consumers, it was clear that retailers had plenty of work to do before consumers would be fully willing to migrate to mobile. However, that bridge could be crossed if certain key issues were addressed, mainly along the lines of ease of use of the technology and confidence that anti-fraud measures were being addressed.
From the consumer side, immediacy and efficiency are the digital gift card advantages we heard about most often in our study. Last-minute gift-givers like having the ability to go online and rapidly purchase and deliver an e-gift card to someone the day before or the day of an occasion (e.g., birthday). Although most people still view gift giving as a very physical experience, when the giver can’t be there in person, digital e-gift cards are becoming more socially acceptable.
For retailers, the advantages of getting the digital gift card offering right are many. According to a survey from the National Retail Federation, gift card recipients are more likely to spend beyond the value of the card. In addition, they might reuse the same card over and over by adding value to it. Furthermore, the digital format sends a stream of consumer purchasing data to the retailer, providing an understanding of as well as a compelling and ongoing connection with the customer. Digital gift cards enable users to check remaining balance more easily than by handing it to a store clerk. Similarly, they hold out the possibility of avoiding lines at the cash register. We gained insight into whether card recipients prefer a digital redemption format to printing out an email, and particularly how millennials feel about this issue.
This last note speaks to the need for a seamless experience. Gift cards are just one piece of a retailer’s merchandising strategy, but getting this piece right from the outset can inform overall multichannel consistency in the larger picture. No matter how a card is used — scanned, typed into a website or swiped — everything from processing the payment to how the data on the transaction is managed and reported happens as one integrated, connected event. Whether the customer is on a tablet, smartphone, laptop or in-store, the retailer needs to have the ability to link all channels and devices into one smooth flow, with the back-end technology completely worked out and integration with the mobile app smooth, painless and confidence-instilling.
In a nutshell, retailers can use their digital gift card offering as a way to test and perfect seamless merchandising. They're one controllable form of many parts of that puzzle. Or put another way, gift cards can be viewed as another dot on the map, to which an integration mind-set should be applied so that consumers can transact with them as smoothly and seamlessly as any other online process.
Looking at these possibilities through a digital lens, retailers might even begin to see how they can integrate and repurpose some factors from their online capabilities into their offline offerings — and back again to mobile. There are definitely parallels between the two universes, and it all comes down to figuring out how the customer will best interact with the environment you create for them.
Mark Schatz is president of Stored Value Solutions (SVS), a global provider of gift cards and stored value solutions. Mark can be reached at mschatz@storedvalue.com. Jenny Parris is head of global marketing and product at Stored Value Solutions (SVS). Jenny can be reached at jparris@storedvalue.com.
