October 2, 2019
Personalization options and convenience are two big reasons people like gift cards, both for giving and receiving. Product eGifting is a way to heighten the personalized gifting experience while offering a unique way to engage with consumers. It allows shoppers to choose and digitally send a specific gift; then, the recipient can go online to determine the right size or color—or choose to use that eGift as a digital gift card.
Merchants continue to look for innovative ways to connect with consumers and present competitive gifting options. The National Retail Federation (NRF) reported that 2017 holiday sales increased 5.5% over the same period in 2016—a number that exceeded predictions. Sales for 2018 equally surprised forecasters, growing another 5.1%.
In other words, all signs point to continued growth, which means brands need to bring their gifting A-game wherever and whenever possible. And when you consider how to increase online sales, Product eGifting is a great option.
Product eGifting is a relatively new offering for retail brands, but even newer for shoppers looking for traditional gift cards. It gives consumers the ability to give and receive a hybrid product/gift card item, and lets retailers provide convenience without sacrificing personalization options.
It’s really a study in the behavioral economics of giving. Market norms dictate that the best gift one can give is cash; it has transferable value, enabling the recipient to spend any amount they desire. However, social norms push back with the notion that cash is impersonal and cold, making it a less desirable gifting option.
Product eGifting presents a happy medium, letting gift card buyers give transferable value without sacrificing thoughtfulness and meaning. It’s an option that caters to the social norms of giving while providing a gift card-like redemption experience for the recipient. Since recipients choose the exact size or color they want, this win-win-win option also allows merchants to reduce costs associated with shipping and returns.
Product eGifting optimizes personalized gifting. The purchaser can select and send a thoughtful physical gift in the form of a digital gift card designated for use on a particular product. The recipient is able to visit the retailer’s ecommerce site to select the option that meets their personal preferences. Anyone who has ever received a gift in the wrong size or color can appreciate the flexibility afforded by Product eGifting. Everyone enjoys a thoughtful gift; few enjoy the hassles associated with returns. Product eGifting also enables recipient to opt for a general gift card in lieu of spending the Product eGift on the product selected by the purchaser.
According to a recent CashStar report based on 2018 Blackhawk Network consumer research, more than half (53%) of respondents expressed interest for receiving a personalized eGift product, with 19% of those respondents indicated they were “very interested.” Women (54%) showed more interest than men (51%) and millennials (64%) showed the most interest—compared to Gen X (57%) and baby boomers (38%).
Personalization seems to be the true differentiator between giving gift cards and giving Product eGifts. Research shows that 38% of US consumers are reluctant to or will not give gift cards as a gift, and 30% of holiday gifts are returned. Product eGifting enables givers to personalize a gift without overreaching on product selection, and it allows recipients to receive something more personal that cash.
We recognize the demand for flexible yet personalized gifting options, and offer Product eGifting for merchants who want to provide consumers this new gifting option. We understand the significance of the gifting experience related to a retailer’s ecommerce site and provide integration options that cater to consumer preferences. Based on our experience with current clients, we have found that Product eGifting can be worth up to 10–15% of the total gift card revenue.