Wednesday, February 17, 2010

Using Digital Gift Cards as a Last Minute Sales Tool

By David Stone, CEO of CashStar

This past holiday season retailers in all verticals turned to gift cards to drive sales, and the results of those sales are no more evident than in the months of January and February when customers return to redeem their cards. In particular, many retailers took the plunge into digital gifting this past holiday season and leveraged these new channels to engage with their consumers and to drive incremental sales

CashStar recently aggregated the data from tens of thousands of customers purchasing millions of dollars worth of gift cards on our digital gifting and incentives platform this holiday season. The data showed that online gift cards proved to be a profitable last minute sales tool for retailers. In fact, Christmas Eve was the highest selling day of the year, with 39 percent being purchased after 6pm Eastern.

Online gift card sales increased more than twelve-fold (1129 percent) between Black Friday (November 27) and Christmas Eve. Sales increased 682 percent between the first week of December and Christmas Eve.

Other interesting results from the 2009 holiday season included:

  • Of those consumers who purchased online gift cards on Cyber Monday, 15 percent chose to send the card at a later date and overall nearly one in five purchasers (18 percent) opted to send online gift cards at a later date
  • This past year more than 97 percent of all CashStar-powered gift cards carried a personalized message right on the card, as consumers utilized CashStar’s best in breed personalization tool set.
  • On average, more than one in eight consumers uploaded their own photo or image as their gift card design for an increased level of personalization.
  • For the week of Christmas, the average face value of CashStar gift cards was 69 percent higher than the industry average for specialty retail gift cards and 151 percent higher for general gift cards (compared to sales info provided by First Data). This trend represents a demographic of affluent, Internet-savvy female buyers in the 31-50+ age range, who are more likely to purchase digital gift cards
The power of the digital channel lies in the flexibility and immediacy with which it can engage consumers. At CashStar, we also tested new marketing and social media efforts that, combined with our clients’ own promotional efforts and the highly personalized features of our platform, created major sales spikes and helped attract new customers.

These results are a critical point for retailers to consider as they move into planning their gift card programs for the next key sales dates such as Mom, Dads, Grads and the summer wedding season. Digital gifting can be the pivotal driving force in generating new more profitable sales and a powerful new way for retailers to engage with their consumers.

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