By Michael
Smallwood, Bitmo
We’re all familiar with the classic gift card — those
plastic little cards of joy that tend to bulge our wallets, and we often forget
are even there. They first came on to the scene back in 1994, when Blockbuster
(remember them?) displayed the gift card in stores. Other retailers quickly
followed suit, adopting them as a promotional marketing tool.
However, despite gift cards representing a $160 billion
industry in the U.S. alone, not much has changed since their introduction. For
retailers, the traditional plastic gift card is a massive missed opportunity. There is no way to track or
measure stored value on a plastic card. Once a card has been given, there is no
way to promote, incentivize or measure consumer engagement. In today’s age of
information, knowledge about customers is king, so a promotional strategy that
provides virtually no insight on customers doesn’t offer the business value that it should.
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Luckily, technology is finally making its mark on this
archaic system, and today’s retailers can take advantage of new digital and
mobile-only gifting options that do far more to enhance the customer experience.
In the face of e-Commerce dominance, an online strategy can
generate door swings at brick-and-mortar locations, firstly by incentivizing
customers to physically go into the store. The mobile gift card platform Bitmo
recently ran a campaign with Sephora that offered users a $5 promotional gift
card redeemable at a local Sephora of their choice. The campaign resulted in customers spending 10X more
at the point of redemption, not to mention a 15% increase in new customers to
the beauty retailer. Of those new customers, 56% went on to become repeat
customers.
Secondly, because of app-generated data, these campaigns can
be highly targeted and thus more effective. Retailers now know where shoppers
are located, as well as demographic and spending habits — all giving them a better picture of their
customers so that they can target them in the right way to drive door swings,
increase spend and deliver a positive experience.
Finally, geotargeting capabilities enable retailers to
target customers at precisely the right place and right time. With data at
their fingertips, retailers can pinpoint the best time to reach customers with
a new promotional offer, based on where they are nearby, when they normally
shop and even when they would normally make a trip to a competitor.
Personalization Drives
Brand Loyalty
With this valuable access to data comes the ability to
target consumers in far more personalized and meaningful ways. Rather than
sending a blanket promotional offer, retailers can now get specific enough to
offer customers their favorite cookie for their birthday, based on what they
know the customer has bought and likes. Sending a gift card (as opposed to a
coupon) also has the added effect of feeling more personal. And we all know
personalization is an excellent way to foster brand loyalty. In fact, researchers predict that there is a $2.95 trillion prize for companies that integrate a smart digital strategy
to personalize customers’ experiences.
Make Your Customers
Work For You
As today’s modern gift card is entirely digital and mobile,
retailers can much more easily motivate loyal customers with incentive
programs. For example, if a
customer is a loyal Regal Cinemas customer, Regal Cinemas could offer several
$5 gift cards to send to the customer’s network of friends and family with a
simple text. This strategy not only increases app users, but also enrolls users
(with their approval, of course) into retail brand loyalty programs.
Campaign Activity Can
FINALLY Be Measured
The old plastic gift card provided very limited insights. However, new digital and mobile platforms
can measure all traffic and promotions from source to payment, even in online
to offline campaigns. This enables marketers to execute highly targeted and
measurable campaigns that truly move the needle for their business.
With the digital capabilities and data available to today’s
retailers, it may not be
long before we hear the swan song of the traditional gift
card. And for good reason — with sound data and the ability to measure
campaigns, we’re very likely to see an explosion of creativity as retailers
compete to lure customers in the most personal, targeted and ultimately
convenient experiences possible. Today’s consumer increasingly wants (and
expects) a mobile-only experience. The brands and retailers that cater to that
demand through innovative mobile strategies will be the ones to reap the
rewards.
J. Michael Smallwood is the Founder and CEO of Bitmo, a San Diego-based fintech
start-up focused on disrupting the traditional gift card space by connecting
stored-value disbursement systems with mobile payments. With a background in
software engineering, Smallwood is a proven entrepreneur and has founded four
successful start-ups. He brings over 20 years of experience in consumer-mobile
technology and management to the Bitmo team, where he continues to drive
innovation in the mobile payments and software space.
