In the ever-evolving, competitive world of retail, one powerful—and often underappreciated—tool stands out: the gift card.
With their simplicity, versatility, and undeniable appeal, gift cards offer an effective and profitable solution for almost every e-commerce retail business. They’re suitable for every occasion, enhance the overall shopping experience by giving the consumer a choice, and contribute to boosting your store’s bottom line. This article will unpack why integrating gift cards into your sales strategy could be an effective addition to your retail business.
The Evergreen Popularity of Gift Cards
Gift cards have secured their place as the go-to present for countless occasions. Universally appreciated, they serve a dual purpose:
- For the gift recipient, they offer the thrilling freedom to choose their ideal gift, making each purchase a personally tailored experience.
- For the time-pressed gift-giver, they provide a quick, hassle-free shopping solution, banishing hours of searching for that elusive ‘perfect’ gift.
This win-win situation has ensured that gift cards are at the top of the popularity list for over a decade. As a live seller or e-commerce retailer, tapping into this sustained gift card demand can unlock a new level of customer satisfaction and loyalty while boosting your sales.
More Profits with Less Risk
There are quite a few financial benefits of gift cards that your business can enjoy.
The moment a gift card is sold, your store benefits from an instant increase in cash flow. Unlike some products, where revenue only registers after the item is used or delivered, the full value of a gift card purchase goes directly into your account right at the point of sale.
Furthermore, the risk of profit loss is practically nonexistent with gift cards. In fact, in many states, any unused gift card funds can remain with the retailer.
Amplify Brand Awareness and Advocacy
Gift cards also serve as a powerful marketing tool. When your regular customers—your brand advocates—purchase a gift card for their friends or family, they effectively offer you a new customer on a silver platter.
Customer loyalty and referral programs can be game-changers for getting new customers and retaining old ones. If you play your cards right, the customers you gain from gift cards can grow to become regular shoppers, encouraging repeat business and increasing the likelihood of these new customers becoming vocal advocates for your brand. It’s a ripple effect that can dramatically extend your reach and reputation.
Encourage Additional Spending
A fascinating psychological element comes into play when people shop with gift cards. According to the National Retail Federation Gift Card Spending Survey, an impressive 65% of gift card holders spend an extra 38% beyond the card’s face value.
When customers spend with a gift card, they’re more likely to indulge in additional purchases, often extending beyond the gift card’s original value. This means your business could generate revenue twice—once when the gift card is purchased and again when it is redeemed. This behavior is a boon for retailers as it drives up average order values and can boost profits significantly.
Perfect for Omnichannel Sales & Marketing
Consumers browse and buy on social media platforms like Instagram, TikTok, Facebook, branded retail apps, and retail websites. Gift cards are perfectly suited to this multi-channel shopping landscape. Since they can be used across all your platforms, it offers a seamless shopping experience for your customers.
Gift cards can also act as an effective behavioral nudge. Offering incentives such as additional discounts when gift cards are used on your mobile app, for example, could drive more traffic to this channel. The data backs up this strategy, with evidence showing customers are likely to spend up to four times more when shopping on mobile apps.
Staying Ahead of the Competition
Gift cards can help you compete in the retail arena. Almost every successful retailer offers gift cards, and by joining their ranks, you increase your store’s competitiveness. It’s a simple yet effective strategy to ensure you get your slice of the retail pie.
The Bottom Line
Gift cards are so much more than a convenient present. They are a multifaceted tool that can elevate your brand recognition, increase revenue without risk of profit loss, incentivize additional customer spending, and provide a competitive edge in the crowded retail landscape.
As retailers around the globe gear up for another busy shopping season, it’s clear that gift cards should be an essential part of any effective retail strategy. And it’s even better for your business when a platform lets you manage all your retail functions from one dashboard. If you’re looking to scale up your sales and foster long-lasting customer loyalty, combining gift cards and live selling into your offering is a smart, effective, and profitable way to achieve your retail goals.