While the significance of ecommerce and multichannel retailing continues to separate the men from the boys, many retailers are having to find other avenues to excel in, to keep their businesses on the modern day, consumer carrousel.
One particular trend that is not necessarily new, but has given new sectors in which to work, is the encouragement of gifting and loyalty. The likes of reward points and gift cards are no new thing in retail circles, but in the digital age, there are now more opportunities than ever before to take advantage of this format.
It has now got to the point where many experts believe this to be as bigger pulling factor in enticing customers into their stores as any other initiative.
“Gift cards have been, and continue to be one of the best selling products for a retailer, hence retailers continue to invest in developing their gifting programmes,” states PrePay Solutions Regional Director, Rachelle Smith.
“They have evolved by load as well as evolving by channel to ensure a multi channel approach. They have also evolved to virtual mediums which first became more prevalent in the US, and are now being widely adopted throughout the UK,” she continues.
This refers, in particular, to the influence of mobile shopping available to consumers. Emails, SMS and mobile Apps are now a major aspect of customer communication and interaction, and retailers are keeping a firm eye fixed on the next trend and change in the market. This is all done with one goal in mind – to drive sales and attract new customers.
Currently, the trend of gifting and loyalty is operated in two main ways, through both promotional and loyalty programmes. The former is utilised in terms of driving customer acquisition, and continually retaining this custom. The latter is a much more revolutionary approach within the industry as a whole, as it aims to shape customer trends in general, and gives individual stores the opportunity to be innovative in their own right.
Through both these programmes, however, is a growing necessity to operate on a multi-medium functionality. To cater for all facets of consumers’ requirements, both physical and digital avenues need to be explored, as Smith confirms.
“The reason for their evolution is that retailers are trying to focus on delivering innovative, cost effective, speed to market ways to attract customers with the objective of increasing footfall, return visits, and increasing the average consumer spends per visit and gift. Promotional activity and loyalty programmes satisfy this requirement.”
In regards to digital gifting, which is becoming the most relevant platform given the current climate, smartphones and e-vouchers are the two flagship initiatives currently being employed by brands.
Smartphones have been acclaimed in terms of the ease and efficiency of the processes, in that they are great for managing and making payments, while the sheer number of people who now own smartphones also make them one of the most accessible formats available, and one that retailers would be remiss in not capitalising on.
E-vouchers similarly offer a level of service speed that paper or card alternatives cannot manage. Immediacy is something that the public look to receive in all aspects of their shopping experiences these days, and the cost cutting advantages that stem from e-vouchers is an added bonus. The reduced inventory and physical documentation is, again, beneficial in the modern age.
One downside to the trend of digital gifting, however, is the initial outlay that stores have to indulge in. Obviously, gifting is only one small part of a store experience, so if the other aspects, such as customer service or product quality fall short, then it may not be worth the cost of conforming digitally before addressing other aspects of the company first.
Regardless of the situation though, Smith still believes that this format is workable across the entire industry: “It can work for all sizes of store as long as the customer value proposition is right and the execution is strong.”
She also agrees with the notion that the weigh up of initial costs compared to the possible benefits is completely worthwhile.
Smith argues that looking further into the future, to remain competitive, retailers will have to ensure they keep developing in line with gifting trends, listing a “focus on a multi channel approach,” and the necessity to “continue to invest in ecommerce and mobile to make and manage payments”, in order to be sustainable as a digitally accepting business.
“The key objective is to enhance the consumer shopping experience by providing them with convenient and targeted product and promotional information which will in turn encourage purchases,” Smith concluded.
Kevin Harrington, Managing Director of Global Prepaid Exchange agrees with Smith’s prognosis of the trend, with a strong focus on immediacy and value being the key areas in which retailers need to excel.
“With extended networks of families, friends, acquaintances, and even customers that often live a long way away, new methods to deliver great gifts and rewards are growing fast,” he explains.
“I think the real danger is falling short of consumer requirements. Ultimately this will have an effect on market share and profitability; those that get it right are already aware of the business benefits.”