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07/05/2023

Evolving retail gift card programs for success

Focusing on what customers want, namely better loyalty programs, prioritization of choice, emphasis on sustainability and increased attention to the design of gift cards, will help retailers differentiate themselves.
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gift card

Retailers are constantly evolving to keep up with consumer preferences, and those preferences are shifting beyond market trends. Modern consumers are also altering how they want to purchase and have changing viewpoints regarding the brands with which they choose to do business. 

In fact, 59% of consumers say a company’s environmental, social, and governance (ESG) practices might influence their decision to make a purchase at that business, according to the Q2 2023 Gift Card Gauge from Fiserv.

In many ways, the tried-and true gift card is going through its own evolution. Originally designed as a means of storing currency, the gift card is now a pivotal tool for retailers thanks to its ability to boost customer loyalty, increase engagement and generate revenue. Consumers, too, are evolving how they think about gift cards, and retailers should take note of how sustainability, flexibility, and design are being prioritized by their customers, according to the recent Gift Card Gauge.

Building a successful gift card program must be done thoughtfully, with careful attention placed on how cards are made and delivered. To that end, here are four trends businesses should consider when building their gift card program:

Gift Cards, loyalty and rewards

Experiences are said to be the new loyalty currency for customers; and building a gift card program that fits neatly within a retailer’s loyalty and rewards program has proven to be a desired experience. According to Fiserv research, 37% of consumers want to use loyalty reward points they have earned with a retailer to purchase gift cards, and 32% of consumers want the option to transfer the value of their loyalty reward points to an existing gift card.

Power of choice

As new payment options grow globally, consumers increasingly want the power to choose how they pay for goods and services – whether that means swiping a credit card, buying now and paying later, or using loyalty points to make a digital purchase. Gift cards are no different, and consumers are emphasizing the importance of flexibility and choice with gift cards. 

Fifty-seven percent of consumers want to buy gift cards that can be used at multiple locations, with multi-vendor gift card options particularly popular among older demographics, according to Fiserv research. Businesses can provide multi-vendor options through collaborations with complementary businesses, potentially at co-located small businesses. Partnerships that promote special events also present flexibility, such as “dinner and movie” gift cards that can be used at both restaurants and movie theaters.

Sustainability matters

Many consumers believe in giving their business to retailers that emphasize ESG. The importance of a strong ESG strategy is not new to global brands, but many businesses have yet to consider how their gift card program can play a supporting role. With that said, consider this:

  •  50% of consumers said they place a great deal of importance on the ability to return used gifts cards to a recycling program.
  • 46% of consumers stressed the importance of using gift cards that are made from sustainable materials.
  • 45% of consumers want to use physical gift cards that do not contribute to plastic waste.

Recyclable gift cards can be made on paper or wood cards, while digital cards also eliminate waste from the ecosystem. Retailers that promote their sustainable gift card programs are in a better position to serve today’s socially conscious consumer.

Innovation by design

Gift cards are often referred to as branded currency — a means for a consumer to store value at a business via a card designed to reflect the brand of that business. How a gift card is designed can also be the reason a consumer buys a gift card from a business. In addition, 39% of consumers say that fully customizable designs are of interest, according to Fiserv. Interestingly, if consumers can design or customize their own gift card, 54% said they would consider purchasing a gift card that incorporates AI-designed artwork.

Retailers are continually looking for new strategies for engaging with customers and securing customer loyalty for the long term. Focusing on what customers want, namely better loyalty programs, prioritization of choice, emphasis on sustainability and increased attention to the design of gift cards, will help retailers differentiate themselves from the competition, improve customer loyalty and generate revenue.

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Sam Lituchy

About the author    

Sam Lituchy is vice president and head of gift solutions for Fiserv, a leading global provider of payments and financial services technology solutions.