With gift card giving and receiving in a full tilt upswing, it might be a good time to examine what is driving this retail phenomenon.


Seven things retailers love about gift cards:

• Higher sales
• Sales continue after Christmas and New Years
• A significant percentage of gift cards are never redeemed (pure profit)
• A significant percentage of gift card redeemers purchase higher than the value of the gift (profit and volume)
• A significant percentage of gift card redeemers do not use the full value of the card (pure profit)
• Opportunities to gain new customers
• Fantasies of increased loyalty


Three things customers love to hate about gift cards:

• Gift cards force you to buy where and what you may not want to buy
• Gift cards are easy to misplace (Where the heck did I put that thing?)
• “I want to buy the $82.70 item with my $100.00 gift card. What do I do with the rest?” (they feel used and manipulated).

Retailers thrive by balancing the deeds of the market place with the requirement to enhance profits. Short-term numbers fight with medium and long-term goals. Think about the gift card opportunity. Not only are you touching a large number of customers, but you have an incredible opportunity to reach out to the social network of your customers.


Are you leveraging the network opportunity?:

50,000 gift cards mean:
• 50,000 customers
• 50,000 receivers

Our continuous interactions with these groups suggest a fantastic range of profitable opportunities.

Givers and receivers want flexibility in giving gift cards and redeeming them. Instead of loyalty, think of givers and receivers in an interactive relationship with you, as a retail concept. You provide a solution to their needs, wants and desires.


Differentiate and prosper, or commoditize and head for the bottom of the barrel:


• Can you give future benefits to the purchasers of gift cards in exchange for their loyalty to you?
• Can you use the receipt of the gift card to begin a beautiful new relationship with the person who received the gift?
• Can you educate them about the full range of value you provide?
• Can you use the new relationship to find out about them and your competitors?
• How can you facilitate flexibility in your card program so that gift cards do not become a source of frustration?
• In 2008, gift cards will continue to flood into the market. How will you differentiate your gift card programs to capture the imagination and loyalty of the market?
• As the gift card market commoditizes, will you differentiate meaningfully or will you become another member of an increasing herd?


Consider this final note on the power of differentiation:

When was the last time you walked by an Apple store? Do it soon. It is not just the product; it is the entire Customer Experience that builds interest, value and trust. I suggest that Apple stores add huge value to the pre-purchase and purchase experience. Apple prospers through attention to all of these details.

When you are in the Apple store, keep asking powerful questions:
• Why here?
• Why now?
• What are they buying?
• What is fun, exciting, and compelling?

Watch where people go, what they look at, and what impacts them.

Now ask yourself: What two things could I do to create that kind of pull and reactions to my brand?

On a final note, gift cards are like an invitation to the ball. There is both giving and getting. What better time to rise above the crowd, to stand out and make the market take notice?

Do you remember how you felt when you received the best gift ever?
Did it matter?
How did you feel?

What if you could hitch your sales to a star like that?