Flourish in a Flash: Quick Tips to Prepare Your Gift Card Program for the Holidays
Please note: Transcripts are computer generated.
You're listening to the Flourish in a Flash podcast with the Flourish team Dez, Holly Kristen and EriKa.
Hi, everyone, welcome back to another episode of Flourish in a Flash. And it's not all of the team. Unfortunately, Erika wasn't able to join us. But you have Dez, Holly, and Kristen and today, we're well into August getting very close to September. And with that, that means we're really close to holiday! Which I think sparks a little fear in everyone in retail...excitement, fear, all of that fun stuff. Um, but one thing that kind of may get overlooked throughout holiday is a gift card specific strategy. And that's what we wanted to focus on today to make sure that everyone has time at to implement some actions and, you know, pieces that can really drive additional holiday sales. So to kind of kick it off, why focus on gift cards, specifically when retailers are building a holiday strategy?
Well, gift card is the most gifted item for retailers year over year at holiday. So to ignore it is an absolute massive miss. For any retailer, I don't care how big or how small you are, the opportunity is just, it's exciting. You know, I think, you know, people tend to go for a gift card, because, you know, it then gives the recipient a bit of choice. And it's an easy to purchase item. And it also helps keep people on budget. So when you think about it, it is really just, it would be you be very remiss to not do something about your gift card strategy and think of it as like, Oh, it's just for last minute gifting. It's not it's not at all. So now is the time to think about not just direct to consumer, but also your b2b strategies and your third party strategies. You have to really take a robust look at your program and understand where can those sales come? And how can you boost them and each of those channels?
Yeah, what's the statistic I think it's the last seven or eight years in a row gift card have been the number one most requested gift item for people to receive for the holidays. So definitely an opportunity to capture that spend capture new customers, you know, when you think about it, the holidays is an interesting time to both capture the customer in terms of the gift giver who's purchasing the card who might not be as familiar with your brand, as well as the end recipient, because that gives her knows Oh, you know, Holly loves to shop XYZ store. I'm not really as familiar with that store. But I'm going to go in there to get that gift card for her. So you're kind of capturing two customers with one purchase. So it's definitely an opportunity that you need to maximize if you want to have successful holiday season.
Well, and just looking at the numbers, I mean, we know that when someone gets a gift card they'll spend above and beyond the value of a gift card. But then even when it comes to the actual purchase of the gift card, some of the research tells us that people will spend more on the purchase of a physical card, then buying more of like a traditional gift, like a shirt or something like that. So you're getting lift, essentially from both areas, the initial purchase, and then when someone comes back into your door, to spend it.
Yeah. And building on that, really, when you think about it a gift card at the holiday time, the promise of a customer walking in leader in the next fiscal year, which is really exciting, because those are your slower times, we all know you're getting tons of foot traffic, tons of site visits during the holiday season. But this is the opportunity if you build a robust campaign to make sure that gift card is walking back in. And you're going to see that lift and hopefully incentivize them to buy the kinds of products you're hoping a gift card will come back in and aid in the purchase of.
So when it comes to kind of driving the sales of the initial gift card, what are some things that retailers need to be thinking about, be it in store online hybrid of both? You know, what are kind of the top things that we talk to clients about?
Well, with holidays, I think gift card designs an easy place to start, right? I think if you can create something that speaks to Hanukkah speaks to Christmas to the new year. And something that also speaks to the kinds of products that you want these customers to walk back in and purchase with the gift card. Not only will it drive the goals of the consumer, but also drive your own internal goals. So those are, that's just a really easy place to start is sort of hinting at what should be purchased with the gift card through design. But then also a nod to the season and the reason for the gift card being purchased and gifted in the first place.
Yeah, and one thing I would add to, especially for certain ecommerce merchants where maybe inventory management can be challenging during the holiday season where maybe you run out of certain products, because they're just so popular and they're flying off the shelves, you just can't keep up with demand. gift card is a great placeholder for those types of products where you could maybe have a gift card with that products, photo or something on the front and say, Hey, I really wanted to get you this particular product. You know, but I wasn't sure what size, what color what very, you wanted. So go pick out your own. And it's a placeholder for that product, if maybe it was out of stock at the particular moment. So it could be a really great way, you know, especially for certain ecommerce merchants to really maximize the sales even when product levels are not available at the time.
Yeah, and I think above like merchandising, for out of stock and everything. There's the larger conversation of merchandising, the gift card as a product, we say it all the time gift card is a product. So where is it on your homepage? Where's it in, you know, your nav bar, things like that? How are you talking about it in email, and really treating it as the product is? I was reading one thing and they mentioned you know, treating it the same way you would will treat your loyalty program the same way you would your social media. So wherever you talk about social media, talk about your loyalty program, and I would add on talk about your gift cards, make sure people know where they can get it, how they can get it, and how to spend it.
Well and kind of building on that talking about merchandising, right, like, and lift. Why not see the lift right away? Why not when you are in store, showcase your gift card next to a smaller item in research that we recently did with the American Marketing Association and the Incentive Gift card Council, we saw that, you know, it's pretty actually we focused on Gen Z. But it's pretty true across all generations, that if you put something next to like a $25 gift card that's worth like five bucks, they'll probably buy the $5 item and the gift card above and beyond that, you're going to see them maybe decrease the value of the gift card. But then again, that's where your internal goals and KPIs would drive. What would you put next to the gift card? How would you merchandise them together? And which sale are you incentivizing a little more, right? Like how are you helping them complete gift. And beyond that it just helps people visualize Oh, this is a good gift. Don't underestimate how much people want you to tell them. This is a good gift, just buy this, especially when your list is super long. And you're buying for lots of people try to help them out. I mean, make it as easy as possible to say put these together, your recipients going to be really happy.
I think we've all been in those lines where we know we have that one other gift and don't have the time or energy or mental capacity to think about it. And it would be so helpful to have just the store tell me here do this, you know?
Oh, yeah. I mean, I'm from a family of like, you know, four brothers. And one brother told me he goes, Oh, no, no, I just shop by what I see what's on the mannequin. And that's it. Like that's how he shops, you know, like, that's it. I know, he's not alone. But it's so true. You just have to help people along in that way. And gift card is just so you easy to be that it doesn't take up a huge footprint. And it's the sort of thing that you know, I mean, it compare with everything in your store. So figure out what is that item you want to push with a high margin item that maybe doesn't necessarily cost a ton, that you can help push out the door. In addition to a gift card, it's a great way to help people just think of a gift, but then also push your inventory. You know, it can be self serving.
Yeah, because we know from the research to that these gift givers want to appear more intentional, and more thoughtful in giving their gifts. So they are looking for that extra thing. It's not just like, oh, they stumbled upon it, but they are actually looking for that additional product to add to the gift card to give as that gift. So make it easy for them, you know, make it like Dez said we don't have the mental capacity or the time. So let's help them out with that.
Yep, well, and I think you know, it's important to look at the other channels to so like in b2b, for instance, I know that some retailers do a holiday run, and it will be a single image. So when you're trying to do a single image that can serve multiple purposes, multiple holidays, you know, tons of different people, I think it is important to pick, you know, a generic enough design that speaks to the holiday season. But then also, you know, this is where you can start incentivizing those companies, your end users to buy your cards in bulk. And you know, one of the things that you have to do is with your advertising in those b2b channels, is point out what people can purchase with that gift card. I think one mistake that we see in the b2b channels is people just saying, buy the gift card, it's the gift of choice, or something very generic like that. You have to tell them, if you buy this gift card, your employees can get access to items like this, you know, again, you have to guide people through what is the end, what what is the end result of this gift card, what is someone going to get what's the experience they're getting. So I would say in the b2b channel, now is the opportunity to showcase other products in your advertising. And then this might be a good time to give, you know, some sort of like a bonus discount, or add on five additional dollars or give something back to the company. This is where I would say it's a good time to start spending and also reaching out to companies who's bought who have bought from you in the past in bulk at holiday, you know, ping them again, help make it very easy on the person who's making this purchase. So they know hey, come back, have a great experience. Again, it's going to be simple, we want you back.
That's really a great point. And I think that kind of leads into the conversation about like promotions and what you can do as a brand to really drive those sales. So there's a couple different strategies you can do both in b2b, third party as well as direct to consumer. You know, and and so maybe let's, let's talk through some of those. So, Holly, you were just talking about b2b. I mean, what can a brand do to kind of really increase, maybe their take rate within some of those programs and make them look as as the more attractive option in that channel?
Well, I think it's back to a little bit of what I was saying there before, about, you know, again, reaching out to people, this is where you spend money on the bonus or on the additional load. But again, I think it's going to be like in b2b. You know, really, when you think about it, you're already giving margin, and you don't have a huge marketing budget for the most part. So this is where you have to get smart. And I really do think your advertising, and the types of ads you're putting out there are going to be very helpful. Because once again, you know, I don't care if it's in script channels, I don't care if it's, you know, if you're selling directly to a company, or if you're in with one of the aggregators and you're running ads through them, you have to tell people what they can buy with that gift card. So that's, that would be my big piece of advice. I've done that for some clients in the past. and it really changed our sales, going from gift card images to product images. Of course, we included a copy about the gift card in there and a gift card image because you have to like say, you know, buy the gift card. But also, here's what they can get. Because sometimes, you have to remind people what your brand is about. And especially in a channel with a lot of noise around the holidays, you want to make yourself stand out. So I would say this is where you do, you know, if you're not into discounting, more or further, do a load, add five additional dollars if they buy X amount, and that can be X amount of cards, or a dollar threshold. So if you want someone buying $1,000 in gift cards, and then you'll add on 50 additional dollars, that might be really worth it, and then you're not discounting your brand, you're just giving an added value. But then this could be where you talked to one of your channel partners and say, Hey, we'll run a bonus for two weeks, we'll get an additional percentage off. So those are just a few ideas that very simple. But now would also be the time I would say, to do some cross promoting with other brands. So if you can do some, you know, like we've seen it where it's like dinner and a movie, you know, so you know, maybe your restaurant brand, and you partner with a theater brand. Or let's say you're an outdoor company, right, and, you know, like, you can create some sort of an experience, again, experiences are where it's at. So you know, think about it that way to cross promote with brands that complement your audience, and could actually give you additional reach, and maybe they're working with an audience that you would like to talk to. So think about things from that perspective. You know, we were talking with a customer earlier this week is like, you know, my holiday audience is vastly different from my rest of the year audience. So keep that in mind. Who are you speaking to at holiday? And who do you want to reach? Are there other brands that complement you that could get you there?
Yeah, that's really a great point. And I would say it's sort of a similar strategy in like the direct to consumer channel where you could offer that additional value. And kinda like I was saying at the beginning, that person who's buying the gift card for the recipient, could also be a potential new customer as well. So you could offer that additional value is where it's again, it's not, it's not discounting your brand, especially if you're sensitive to that, but you could be giving them, you know, an extra 510 dollar gift card, when they buy a certain threshold amount of gift cards in the direct to consumer channel as well. So that could be another way for that person who's buying the gift card to experience your brand themselves, and a great promotion to kind of get that additional customer in your store to make another purchase. So that's another strategy, you know, that I always love seeing when there's that additional bonus card associated where you can actually use that as self use as the gift buyer.
I would also say this is the time of year to think about fun packaging. You know, there are things like your packaging can be dual purpose. So again, this can go back to merchandising with a product that could actually hold it. Like, you know, for instance, I mean, I've I don't know, I always see people doing the, like the coffee mug with a gift card in it. timeless gift. People love it, I'm always excited to get that. So, you know, think about that, like what can hold a gift card that you're already selling. But also, this is the time to reach out to your partners and say like, ooh, could we create, you know, a miniature of a product we have, right, and it could be an ornament, and it could be a gift card holder, it could be a fun box. You know, it can be there's so many things that it can be right. One of my favorites has to be the the Home Depot apron, the orange
I mean, it's so obviously it has no use to me other than just being the packaging, but just it's such a cute way to present the gift. I love it as the gift recipient to get it adorable. Obviously, it's not really an ornament, it's not really something I can use for anything unless, like, I had a kid who wanted to like dress their baby doll up or something. But you know, otherwise, it's just really adorable. And it really speaks to the brand. So thinking of those ways to really tie in your brand, your brand identity in fun, you know, meaningful ways is a is another way to really incorporate that as well.
Well, and to kind of just touch on that. But the hybrid of like merchandising and packaging, where I've seen multiple retailers do like a frame ornament, that was a gift card holder that I know was really popular. And then there was a chain that did like gift cards, but already like kind of popped out of little miniature wallets and stuff. So taking the products that they do sell, and incorporating them into how to present as the, you know, package.
Yeah, that I love that I think that's just such an easy win. And that's the sort of thing that you can let your store manager have a little bit of fun with. Because, again, we always know that different markets sell different items, I don't care if you are one of the biggest brands in the world, you know, you're going to sell different items in Chicago than you do in Kansas City. It's just because you know, people have different preferences based on locations, and you know, lifestyle. So I think that's a really fun way to let your store manager have a little bit of fun, and showcase their own creativity. So you know, maybe incentivize that with your employees, have them send you pictures and maybe reward them for the best sort of display. And you don't have to put too many restrictions around it, you can just let them have some fun with it. And it gets them thinking about selling gift cards at holiday, which I know is somewhat of a challenge. Maybe when you don't have as many people on, you know, I know, during the holiday, there are more people on the floor that are there. Their attentions are also very divided, right? So and sometimes they're seasonal, so they don't know a ton about your gift card program. So this can be a way to get them to have a little bit of fun with it, and become a bit more familiar with the gift card at a time and they should be selling more. So I think one of the other final things to really point out and pretty important, would be your internal and external deadlines at this time. That drives a lot. And it drives it definitely drives why we're talking about this right now. So we all know that retailers, processors, anything that touch payments, we have freeze deadlines, right? So make sure you are talking to your processor to understand what is their freeze deadline. Talk to your e commerce team to understand when is the deadline for making website changes. And then you also need to talk to your printers, your fulfillment everything. Understand when your deadlines are your you're probably hitting up against them pretty soon right now anyway. So if you haven't had that conversation, you need to have it ASAP, like stop listening, because we're going to stop here pretty soon. So you know, give yourself a few more minutes. But anyways, after that, go call people make sure that you are going to hit these deadlines so that you have a smooth holiday season and you're not biting your fingernails wondering if you know this card stock is going to make it in store in time.
That's absolutely true. I mean, I'm working with a brand right now on some packaging ideas. And it's like, okay, you know, we have to make a decision, like in the next week or two to get this packaging in time. And, you know, a lot of people don't necessarily think about that. They're like, okay, it's just the end of August, I have plenty of time until November, when I need the seven sock. Well, if you're going to have something produce, shipped, you know, to you and have it in time, you're going to need to make these final decisions, you know, like tomorrow. So definitely finish the podcast, and then go do this.
I think you know, again, there's a lot that you can do here. And you know, it's not too late. Like if you guys need some help give us a call, we're happy to step in and help you create some last minute holiday strategies that you can implement pretty easily. Again, there's a lot of tools that you have at your disposal that aren't going to take extra time to put together right. Just think about how you can creatively use what you have. And then you know, make sure that you have if you want to do something extra just be talking to your vendors and your suppliers. And make sure that you are in time for those deadlines because there's still time to create something really great for the holiday season that can lift your top line sales. They can drive specific goals and KPIs you know, and they can help you with your customer engagement and retention strategies.
Flourish in a Flash is produced by K+H Connection, a branded currency consulting firm. You can learn more about K+H at khconnection.com. And you can always find out more about flourish and the flourish conference at flourishcon.com or follow us on all of our socials on Twitter, Facebook and LinkedIn it's @flourishcon and on Instagram, it's @flourish_con