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Flourish in a Flash: It's Time for Branded Currency to Bloom.

Episode Transcript

Please note: Transcripts are computer generated.

Intro 0:04

You're listening to the flourish and a flash podcast with the flourish team. Does Holly Kristen and Erika.

Desiree Wiercyski 0:16

Welcome back to another episode of flourish in a flash. And this is, I', really excited about this episode because we are coming hot off the heels of the first ever Bloom Digital Summit, which was, I would say a roaring success. The whole team was really excited about it and we have a lot of good interaction and questions and it was a great day of content.

For those of you that may not know what Bloom is, it is a single day digital summit. So it's available wherever you are focused on the growth of branded currency, specifically for digitally native ecommerce brands that are website first and may not even have a brick and mortar storefront.

So it was a full day of looking what brand new currency really looks like for those new and upcoming merchants.

The day kicked off with, you know, really a basic foundational understanding of why should Why should these types of brands care you know, Shopify and Magento and a lot of these e commerce platforms make it easy to turn on a gift card. But for a lot of brands, it's well why should I invest time beyond simply saying, okay, I want to do it.

So we kicked off the day looking at the benefits of branded currency, which I think a lot of folks are very aware with when it comes to increase spending increase kind of footfall or website traffic as the case may be. And, you know, the idea that it really it makes it easier not just for the purchaser of a gift card.But for the recipient to and makes it better for the brands in that there's less returns, you know, especially when you are a e commerce based brand, those shipping returns they'll get Yeah. So finding ways to get around that can be really beneficial.

We did look at some kind of a newer, interesting Digital Trends with brands that you know, are a bit newer haven't been around as long as these as the major brands that we always talk about that we all use as examples for things. So we looked at the fact that unique and unified checkout processes are quickly becoming less standard. We are in the midst of going through data for an e commerce specific gift card program review for what the state of gift card looks like for these merchants, and we don't have hard numbers just yet, but a sneak preview.

And unified carts are so much more popular than I think a lot of us that have been in the industry for a while really kind of know or expect. Warby Parker has a great flow. And I'll be sure to include the screenshots in the show notes on our blog for this one, where it's a bit different, you can select your date and everything. But all of this is done on the Shopify platform.

Holly Glowaty 3:30

Dez, you bring up an interesting point with that. I think with these brands, in particular, a lot of the technology resides within their e commerce platform. So Well, a lot of larger brands are sort of having to piecemeal a bit of these processes. You know, they're they're going to go to a processor, they're going to go to an E gift card platform, they're going to be going out and saying, okay, I want you to come into my system and connected to all these places. I feel like you know, it

It's funny to think that these large brands are operating from a disadvantage almost because they don't get to create these unified experiences, because their systems are so much older. But I know we've talked about it before, it's like, retailers were never meant to be tech companies, right? Like their legacy retailers. They were really selling goods and services at brick and mortar. And they had great real estate, right? So now they're trying to like retrofit tech into this old model. And so you're seeing this. It's really interesting. And I think for our industry, in particular, technology providers are gonna have to adjust a bit if they want to attract these newer niche or specialty retailers who are seeing, you know, pretty interesting growth, I mean, rapid growth, I would say and quite a cult following.

Desiree Wiercyski 4:52

That's a really great point. I think it you know, looking at a lot of the research we've been doing, beyond just like the digital tech platforms we're seeing these niche retailers looking at what a gift card can do and making it very specific for their product for their consumer that they know so well as opposed to you know, the legacy retailers that are the big box stores and going for pretty much everyone we we really embrace the flexibility of branded currency and it is great and it's great in that you can refine it for your very specific audience and your very specific business purpose you know, whatever it is you're looking to do.

A couple of the other trends that we saw with within the kind of digitally native space are the idea that brands are using their gift card. In social media, they're taking this product because again, like they may not have a storefront How do they show this? How do they show the option of the gift card in a different way, and they're taking even just like digital renderings of their cards, and putting promos above it. We again we have some examples that will share in the notes, but Kylie Costmetics has digital renderings from a Shopify store on a different background, helping with a 12 Days of Christmas promotion. Just super simple and really engaging. And it connects to what I'm assuming is a larger business goal of increasing social media engagement because the they're asked in the story is leave a comment, like, let us know. Let us know what you would spend the gift card on.

And then the the third trend specifically for these types of retailers that we looked at was the idea of micro influencers. You know, we hear a lot about influencer marketing and the conversation of what that looks like what that's going to look like and a different conversation. But really what brands are starting to do is use branded currency for this one on one referral opportunity, you know, share with a friend that you like this brand, they'll get $50 off. And you'll get $50 off to it really plays off of a concept, which there's a lot of research out there showing that brands care about what their other friends are buying and posting on social media. So if I, this, this idea is taking it another step further in, you know, asking your customer base to give their friends a specific call to action versus just look what I got from the store. So, interesting things that are happening to Holly's point, the platforms that these programs are being built on allows for more more unique insight and opportunities that brands can take advantage of and I think we're going to definitely continue to see a lot of innovation around ecommerce gift cards. It's not just a brand's digital gift card it is gift card programs for e commerce. And I think that that's a little bit different. After the opening presentation, we talked a bit to Holly's point about what are the options out there? Holly, I don't know if you want to review a couple items.

Holly Glowaty 8:37

So, you know, this was more of just a discussion like we have on the podcast with you guys all the time, that we were talking a little bit about, you know, what is it that you know, what do you have at your fingertips no matter what size retailer you are, we did try to tackle it from both sides because when we looked at our audience was actually a good mix. So when you're looking at what's available to you for building not just a gift card program, but a loyalty program and promotions and tying it all together. It's truly interesting to look at how innovative it is right from the get go, no matter what your size, if you are launching an e commerce shop, dig into the tools that are available to you no matter what level you've bought into, because there's so much out there. I mean, when you're on, so we looked at things for Shopify, magenta, and Shopify plus of course, and then woo commerce, some big commerce for those smaller retailers. And every platform is going to be different, right? You have to have different plugins and things like that different tiers that you buy into are going to allow you different opportunities, but there is just so much that you can automatically go after. So for instance with Shopify Plus, if you're mid tier, you get gift card for free. Like, you get digital gift cards for free, no processing fees, nothing. It's built in to their offering. Now there's limitations with them, you're not gonna be able to do bulk programs, if you have old gift cards in the marketplace, uploading those, those serial numbers that are out there and using them take you a while because it's kind of one by one.

But the opportunity is there. And so it's interesting to see that the built in and it really is viewed as part of a direct to consumer strategy. That's the other piece I find interesting is much more integral and integrated to these seamless experiences that these e commerce companies are creating for, for their customers. So you know, some of them have great designs, some do not. Some are going to require a plugin. It's just going to depend on the platform that you're working from.But more, you know, even more exciting to me is the fact that you're going to have all this data, and it's going to your data. It's not going to processor first, it's sitting with you, in the back end, you have access to it. There's a lot you can do with that. And I know Kristin talked a lot about like digging into data and seeing, you know, what you can do with it, what you should be doing with it, what you should be measuring. So I don't know if Kristen, you want, I feel like this is a good point for you to launch in on a little bit about that.

Kristen Thiry 11:28

Absolutely. Great transition. So yeah, I think honestly, the biggest the biggest takeaway I you know, I quote Peter Drucker all the time, say, you know, what gets measured gets managed. And I think that's really a key for any branded currency program, you've got to make sure that you are looking at the performance of your program holistically you are knowing kind of what those levers are that you can play with and how they'll affect your program. And the only way to do that is to kind of have that baseline. And the only way to get that baseline is to make sure that you are regularly reporting on the performance of your program, you know, and really, that helps you with, you know, reporting up to your senior leadership if you're in a larger organization or sharing it, you know, within your organization and being that advocate for the program, you know, within your organization to really prove the value.

So, you know, I really I talk a lot about, and we talked a lot about during the day of just, you know, communication is key and making sure that you are the advocate for your brand and currency program within your organization. And that, you know, 29% of people say that their, their company's current method for internal communication isn't working. So we just kind of gave you some tips on how to see the signal through the noise because there's a lot of information out there and really condensing it down into a quick, easy snapshot to digest is really important. So I talked a bit about the different data sources, you know, obviously, like your internal stakeholders that you can leverage as well as your external stakeholders. So whether that's your processes so if you're a bigger brand using one of the bigger gift card processors or like Holly mention one of the e commerce platforms. And you're using their gift card widget, your internal stakeholders, obviously your e commerce team, your marketing team, that kind of stuff. Like those are all people who can help you colate all this data to really tell your story.

You want to make sure you're looking at, you know, both the sales and load side of things as well as the redemption side of things, and, and different data points within there. And that's certainly something we can we can give you that full list. I won't go into it now and rehash the whole presentation. But there's certainly a lot of different data points to touch on, on both of those sides, and really measuring that, that overspend or lift. I mean, that's ultimately how we prove the value of our branded currency programs, right is what is that incremental revenue that you're bringing in the door, to kind of prove out that ROI and to make sure you're breaking things down by channel and looking at all those promotions and different things that you're running, and that you know, your true baseline costs to run your program. So those are some of the really important things to be looking at. And once you have that baseline, as I mentioned, then you can start to develop, you know, a better sense of what are the industry trends? How are things sort of changing over time, both in the broader industry as well as for your organization.

It can help you identify anomalies that my signal fraud, you know, if you start to see a huge spike in gift card purchases, you know, you you might be able to say, Okay, well, that was attributed to this marketing campaign or that marketing campaign. But if you didn't run a marketing campaign, you definitely want to look into that and see, you know, what might be the reason that you're seeing those big spikes. And then finally, it lets you sort of test and learn and you can change different levers and change different things and isolate various different variables to really understand how those different elements affect your program and, and grow and learn from there.So those were some of the key takeaways from the data presentation. Definitely a lot more meat and substance in there with the individual variables to be looking at but certainly a good kind of high level overview of what we covered there.

Erika Frey 15:16

And I think speaking of just covering what you guys covered in Bloom, I found it really interesting because as everybody knows, I'm pretty new to the industry but coming from with some bait coming into bloom with some basic information and knowledge from the past couple of months. I feel like Bloom really put things in perspective for me because it could get really overwhelming and I can imagine for an ecommerce company, you've got so many things on your plate as it is you have limited resources to be able to do a lot of things and taking on the idea of a gift card could be daunting, but the way that it was presented in Bloom it kind of like once you have the strategy and idea in place and you got to do your checkoff list in terms of what's the purpose? Why are you doing it? Why are you doing a gift card? Are you doing it just to do it, that shouldn't be the that shouldn't be the case, there's a lot more to it to make life a little bit easier and start planning, you know, start slow and then kind of grow from there, which I think is, you know, a very organic way to do it. And I feel like the team presented that really well for you know, people that are new to the industry, but also for the people that have been in the industry to learn how they could take their program even further gift card loyalty programs and not make it complicated like it could be if you look at the big picture.

Desiree Wiercyski 16:38

Well, Erika, to your point, I think one of my favorite learning shots today and one of my favorite perspectives was Holly's discussion around loyalty programs. And this idea that you don't need kind of a conventional or truly bit built out loyalty program but look at ways to trigger loyal behavior. I don't know, if Holly, you want to talk about that.

Holly Glowaty 17:04

Yeah, I, it was kind of fun digging into this side of things even more, because I think one of the big goals and conversations we have a lot with people is like, Well, how do I? How do I create a loyalty program that everyone wants to be a part of? And it's like, well, you have to look at your consumer and say, Well, how did you get here? Number one? And number two, what are my goals for this? Is it that I want them in a program? Or is that I want them behaving in a specific way. And I think more often than not, it's you want them behaving in a specific way. So what we're doing right now is we're creating sort of a framework for here's, here's where you begin, take stock, look at what you have looked at the behaviors, you want to incentivize what makes a good customer, what is an average customer, and really just set some baseline for yourself. So you understand where you need to grow and where you need to go and it's going to be different for everybody.

But in the end, you don't necessarily need points in a punch card. While we'd love that, I think as you're starting out, why not test what works when you pull specific levers and reward a specific things, test, first learn, and then as you have people already creating these behaviors with you, and really reinforcing their loyalty for your brand. And that's when you can really formalize it. So it doesn't have to be so daunting, it doesn't have to be so formalized from the jump. I think it's understanding a bit more of will, what is it you want from your consumer at the end of the day? And it's it truly is less complicated when you can take a step back and say, Oh, I actually have a ton of tools at my disposal that maybe I just never connected the dots before. You know, maybe I never thought about my newsletter, interacting with, you know, a consumer in this specific way or Oh, there is an integration between my ecommerce platform and my newsletter, or between my social media or something like that. So I think there's a lot there that sometimes it just takes, you know, sitting down for an hour, and looking at what you have, and then realizing you can do this. So that was a, it was a fun conversation to have. And you'll see in the presentations, that there's a, you know, kind of the, we'll call it the lite version of this framework. So you guys can kind of start thinking through it yourself.

Kristen Thiry 19:33

Yeah, so Holly got to review all the fun stuff about loyalty programs and customer engagement. And then we go right into the doom and gloom of fraud.

Holly Glowaty 19:42

That was great. I did call dibs on the fun stuff before you got a chance. So that was, that was my fault. I'm gonna let everyone know.

Kristen Thiry 19:50

It's all right. You know, I am one of those sort of data geeks who actually really kind of loves digging into fraud. I find it sort of fascinating and sort of a, I don't know, a sort of scary way, but, you know, understanding kind of how the fraudsters work and what their motivations are and kind of what they're doing. You know, it's it's a constant evolution. So there's no kind of one one size fits all solution. But you know, one of the things in in this session that we really tried to dive into was, you know, what does the fraud landscape overall look like not just specific to gift card, but mostly specific to like consumer credit card fraud.

And we gave some definitions there and kind of talked a little bit about charge backs and why they're so detrimental to a merchant and why you really have to make sure that your chargeback rates remain really low. And and basically to do that, you have to make sure that you've got proper fraud measures in place to prevent those, those fraudsters who have stolen people's credit cards from making transactions on your website or at your point of sale. And then we talked about kind of some of the trends that they are basically committed, you know what they're doing between device takeover

And, you know, testing by, you know, files of 10s of thousands of card numbers to see which ones are valid, and then really playing the long game. I mean, I think that's what's so fascinating. I think a couple of years ago, we saw a lot more instances of, you know, once your credit card number was stolen by a fraudster, they would just blow out your entire balance and make these huge purchases and know that you're going to get they're going to get cotton carton be shut down immediately. But the trend lately is that they just trickle in those purchases so that it goes unnoticed by you the not as attentive credit card holder. You know, I'm certainly guilty of this, I kind of glanced at my statement, Leah that generally looks right. I don't go line by line to make sure everything matches. And they're counting on that, you know, they're counting on consumers being a little bit lazy in that regard, and so they'll make purchases kind of well within that normal threshold, so that they go unnoticed and they can just keep using it and they keep using it. So it's a bit of a different shift in behavior for fraudsters in that regard, and the

You know, fraud is always a delicate balance right? For merchants, you're trying to balance that risk of charge backs versus the risk of a false positive, because one of the things that we found is that if you falsely prohibit a good customer from transacting on your website, because something about that transaction looks sort of like fraud, you their their lifetime value drops 56%. So that's huge. You're taking over 50% of the value of that, that particular customer away by by turning them away, because it's a bit suspicious just once. So it's a constant balancing act, you know, you can't shut it down entirely. Otherwise, you won't have any customers at all, but you can't open it too much. Otherwise, fraudsters will certainly take advantage of you. And this is no small problem. You know what we're going to have 130 billion dollars in projected consumer credit card fraud by 2023. So, certainly a big issue that we've got a we've got to tackle. We've got to make sure we're on top of.

I gave some key data points to the monitoring and measuring specific to your gift card program because I don't know about you, but my inbox is full every day with Google alerts about gift card scams and frauds and other things. So we know that it's constantly getting the attention of the media. And you know, fraudsters are constantly taking advantage of gift cards, specifically, because it is an anonymous cash equivalent product, right? So it's a prime target. And really, the only way to stop fraud is to stop selling. And we know that's not an option, you know, it's a it's a cost of doing business. So it's something that, you know, everybody needs to be aware of everybody needs to be tackling. And I gave some tips on, you know, certain items to be enabling and monitoring and how to kind of add that to your dashboard. So, I won't again, go through all of that right now, but definitely a lot of meat there to kind of dig into and make sure that your program is, you know, complying with a lot of that a lot of those different monitoring aspects and checking for invalidating when it comes to both the purchase of a gift card as well as the redemption of a gift card. And there are resources and other things to kind of help you with that, which we can certainly put some links in the show notes as well, to some of those resources, but, you know, FinCen so the Financial Crimes enforcement network, they are, they are definitely like the main governing body who monitors gift cards for you know, terrorist financing or, you know, any other sort of fraudulent activity. So, they're kind of the one of the main sources of resources that you can point to, and then also, the FBI has some stuff out there as well as some industry resources. So we'll put some of those links in there as well so that you can make sure your best arming yourself and your brand to combat fraud.

Holly Glowaty 24:56

So yeah, we dug into a lot. This is only scratching the surface. So Dez, for accessing this stuff, I guess what can people do so they can get all this information are we going to? Where should they go?

Desiree Wiercyski 25:11

A lot of the examples that we specifically talked about on this episode will be on the show notes on our blog. And then we will be making all bloom available to folks within the coming week, and we'll have a link on the flourish con website to access it as well as the KH website. So keep watching social media and our email list and check checking on either of the websites for when it's fully available.

Holly Glowaty 25:41

It was really fun to do and it was it was great to do something digital because I think a lot of what we have to do is you know physically show up at conferences and things and and I think when there's so much going on, it's hard to choose where do you put your travel dollars so it was fun to do something digital but as we all know, we are also in the midst of conference season. So our team is going to be on the road quite a bit over the next few weeks. Holly and Kristen are going to be in London for the IMA Europe meeting and incentive awards. So if you are going to either of those are both. Let us know we'd love to meet up with you guys. And then Erika or Kristen, guys want to talk about RGA?

Kristen Thiry 26:26

Sure. So Erika and I are heading to Phoenix for the RGA forum. Kind of the end of September beginning of October. So yeah, if you're going to be there, we will too. So let us know. We'd love to get together. But yeah, we're excited to kind of hear what RGA has planned their their agenda looks great. So definitely excited for that. And they're definitely excited to connect with all of our industry friends. So, so yeah, let us know if you'll be there and want to meet up. Holly, can you tell us a little bit more about the direct to consumer conference you went to last week?

Holly Glowaty 27:02

Oh, yeah, absolutely. So guys, last week I was in New York, the company YotPo had put out a direct to consumer conference for about, I think in the end, it was about 400 people. And just eyeballing the room. What was fun about it was it was a lot of these e commerce ecommerce companies, right? We're direct to consumers a massive part of their strategy. So how a lot of interesting conversations about gift card about loyalty and about promotions and how they're all you know, working with these products in very different ways that I would say, large retailers are. So it's kind of interesting to have this new perspective and this new view. I think I'm going to write a blog post about this so that you guys can dig into that a little bit more and see some of the big takeaways but I'd say the big three things are number one, I think escheatment is a black hole as it is for many of us, but for these companies in particular that have never had to deal with it, trying to understand achievement, that's a big thing. Number two, what's interesting is they see that I heard more people talk about having functionality where you could digitally gift a specific product, much as we've seen with our friends at Jifiti and Loop Commerce, be able to do on websites and using kind of gift card in the background there. That was a big trend. And then the third is the way that they're interacting with customers they consider loyal. So there's, there's a, it's a very different model. And it's an exciting model, in my opinion, because it is its innovative. It's meeting it's very, you know, it's meeting customer where they're at. It's very contextual, I would say more so than the rest of that a lot of the strategies we see out there and get to talk about frequently so we'll be breaking that down in a blog post soon so you guys can see that as well.

Desiree Wiercyski 29:02

Yeah, we have, if you couldn't tell we have a lot of stuff coming down the pipeline. It's a very exciting time. I think the whole team is excited not only about the conferences coming up, but the growth and innovation that we are seeing and the different conversations that are happening. So make sure to stay up to date on the latest stuff coming out from the KH employers team. Again, follow us on social media, our LinkedIn page, Facebook, Twitter, it's at flourishcon and then Instagram is at flourish_con. and sign up for our newsletter. So you always know when there is a brand new podcast out. And if you like this podcast, if you like the topics that we're talking about it would it mean the world to the team, if you would go ahead and leave us a review, even if it's just rating us, between one to five stars, hopefully five and we'll be back. soon for the next episode.

Outro 30:05

Flourish in a Flash is produced by Kane each connection, a branded currency consulting firm. You can learn more about K+H at And you can always find out more about Flourish and the Flourish Conference at or follow us on all of our socials on Twitter, Facebook and LinkedIn. It's at flourishcon. And on Instagram, it's at flourish_con.

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