Inaugural conference brings together retailers, marketers and thought leaders to explore branded currency strategies
Experts across the retail and payments industries recently gathered in Omaha, Nebraska to attend the inaugural Flourish Conference, which focused on opportunities for branded currency within retail organizations. With the payments landscape evolving so quickly, it was beneficial to dive into the state of branded currency—the concept of stored value created by a brand—in today’s marketplace and explore the actionable steps merchants can take to address both the challenges and growth opportunities brought about by gift cards, prepaid, loyalty programs and more.
A couple of years have passed since the “Branded-Currency Revolution” first took root, and in that short time we have seen first-hand how effective branded currency has been for our clients when used strategically, leading to an evolution of the concept and its application. With branded currency as the underlying glue, gift cards, loyalty programs and promotions are being used together to reach broader marketing and business goals and to transform the customer experience.
According to a NAPCO research report published earlier this year, branded currency in the form of gift cards is preferred 2:1 by consumers over other marketing incentives and tactics such as coupons, branded dollars and rebates. In fact, 58 percent of consumers surveyed specified that gift cards are their most preferred form of promotion—but surprisingly, only 25 percent of retailers are using them as part of their promotional programs. This disparity proves there is a huge opportunity for merchants to utilize branded currency more strategically to meet the needs of their customers.
Nate Smith, CashStar’s Vice President of Marketing, gave an informative talk at Flourish, titled “Acquisition, Engagement and Retention with Branded Currency,” which highlighted many real-world use cases of successful branded currency strategies including:
- Acquiring new customers.Encouraging existing customers to purchase gift cards and merchandise as gifts for family and friends is just one straightforward way merchants can grow their customer base. However, partnering with other merchants to host co-branded promotions involves two consumer bases. A good example of this is the partnership between Starbucks and Groupon to offer a promotion for a $15 Starbucks Card eGift for the cost of $10, helping introduce each company’s customer base to the other’s brand.
- Incentivizing specific behaviors. Whether you’re looking to increase basket size or drive specific purchases (that most effectively increase the lifetime value of a customer), branded currency is a great tool to have in your marketing arsenal. Merchants can try this strategy alone, taking a cue from a Crate & Barrel promotion that offered a $25 gift card with every $100 merchandise spend, or partner with other brands to help drive sales of a specific product, like the Target and Samsung partnership that incentivized customers to pre-order the Samsung Galaxy S8s and receive a $100 Target gift card. Promoting services and loyalty programs are also great use cases for branded currency. For example, Petco offered a $30 gift card when its customers signed up for repeat delivery. To foster a deeper relationship with Apple, lululemon athletica rewarded shoppers who used Apple Pay with a $25 gift card.
- Remediating customer care issues and returns. Utilizing branded currency doesn’t have to end at checkout. Several brands have incorporated gift cards into the full customer lifecycle by implementing strategies within their customer service departments. Merchants are taking advantage of the opportunity to issue refunds and pay warranty claims in the form of branded currency to lock in spend on future purchases (with the potential of upping the spend as well). Walmart, L.L. Bean and The Home Depot are just some of the retailers using this practice. Furthermore, addressing customer complaints with branded currency to “make good” can incentivize the consumers to give you another chance, rather than jet to a competitor.
With its potential to drive incremental visits, up-spend, higher margin purchases and more, the power of branded currency is undeniable. Even more, research shows consumers want it! A special thank you goes out to K+H Connection for rallying the industry around branded currency. We were thrilled to take part in such an engaging dialogue, express our vision for branded currency and share insights from our work with clients.