Behold The Power of Gift Cards
For more than a decade, gift cards have posted year over year increases, surpassing the $120 billion mark (according to MerchantWarehouse.com) for businesses large and small alike. While the percentage of revenue coming from e-gifting continues to grow, the bulk of gift card sales, according to Gift Card Granny’s Trae Bodge, is still coming from traditional plastic.
For years, large box stores and retail giants were the only ones reaping the benefits of gift card sales. In recent years, however, more small and mid-sized retailers are leaping in – with both feet – for a chance at brand awareness, customer loyalty and, of course, increased sales. All three are considered the benefits of gift card usage an here’s why:
Brand awareness comes with gift cards that bear your company’s logo. Every time the recipient looks in their wallet and sees your card, your brand is re-affirmed as both positive and familiar. This is always a good thing! Offer gift cards for those coming to your business or shopping on your website. When unsure of what to buy, customers know they cannot go wrong with a gift card for their gift recipient. You can offer gift card add-ons, gift card holders, small gift bags or other items to ‘dress up’ the cards, all of which add to revenue.
Customers who receive gift cards, according to Bodge, are likely to return. More than half of all gift card recipients need at least two trips to spend down the entire card. Multiple trips to the store are inclined to endear a customer to the retailer’s environment. Further, offering promotions with gift cards (for example, “Spend $100 in gift cards for a friend and receive a $10 gift card for you to use!”) result in return visits from the buyer, not just the recipient.
Increased sales are the usual result of gift card usage. Bodge’s statistics reflect that more than 75 percent of gift card shoppers surpass the value of the card with their purchase by 60 percent. The result is additional retailer profit. It should be noted that gift cards that are not spent in their entirety also result in additional profit to the retailer. In either case, the retailer wins.
Gift cards are a great gift for holidays, occasions or ‘just because’. Parents now use them to teach credit card basics to their children as new shoppers. In short, it is ALWAYS a good time to sell gift cards.
Retailers will find that gift cards, which are not usable until activated, provide trackable statistics and trends, as well as reduce shrinkage from both customers and staff.
Retailers are not the only ones who can benefit from offering gift cards. Service providers can use them to promote business through gifting, offering premiums to those pre-paying for services with gift cards (i.e. buy five get one free) and more. Let’s use the pet industry as an example. With more than 380,000 professional service providers – from pet sitters to dog walkers to boarders and groomers, the pet service industry is an important sector for U.S. jobs. Many new professionals are anticipated in the coming decade as the industry. According to the US Department of Labor, the industry has shown growth of nearly 8 percent year over year, a trend that is expected to continue. IBISWorld, a leading provider of business research, notes that the pet industry “has benefited from changing consumer attitudes, which increased demand for a variety of new luxury pet services. Over the next five years, this trend is expected to gain further momentum as pet ownership rises and owners use their increasing disposable income on services for their pets.” In order to keep a step ahead of competition, groomers, like service providers in every competitive industry, will need to set themselves apart. Fair pricing and excellent service are expected. By going the extra mile and offering gift cards, groomers can enhance business by making their service the most convenient one in the area.
It is hard to find a good reason to avoid implementing gift cards at your business. Increase sales, develop customer loyalty and deepen your brand awareness with gift card use. What are you waiting for?
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