This year, for merchants looking to pick up some ground on the competition—as well as some additional market share—innovation in gift card programs is the key. As emerging technologies change the retail landscape almost continuously, using gift cards to connect with customers has become a constant challenge.
One promising way to meet this challenge is through contextual commerce, the concept of seamlessly integrating purchase opportunities into everyday activities and natural environments. The idea is to allow consumers to buy anytime, anywhere—with the click of a button, a tap on a display or, even, just their voice. Contextual commerce lets you engage with customers according to their unique preferences, and places merchants squarely at the intersection of shopping and new technology.
Understanding the Modern Consumer
Today’s consumer looks much different than even just a few years ago, primarily because they are more connected than ever. Within two years, each US adult is expected to own six or seven connected devices, a total of roughly 50 billion total connected devices. Smartphones will continue to make up a large chunk of those and have already been woven into every aspect of life. In 2017, global revenue from smartphone sales totaled $478.7 billion and adults in the US spent over 3.5 hours per day on their mobile devices.
As emerging technologies create more opportunities for consumers to connect, smartphones will give way to other devices that present merchants with new selling opportunities. Gartner predicts that by 2020, people will converse more with bots than their spouses, and 100 million consumers will shop in augmented reality. IDC projects spending on AR/VR products will hit $27 billion this year (in actual, non-virtual dollars), representing a whopping 92% increase year over year.
Millennials between the ages of 18 and 34 represent an interesting opportunity for merchants. In 2017, when they reached $200 billion in spending power, millennials usurped the spending power of all other generations. In order to harness this powerful consumer base, merchants need to understand what millennials want.
The shopping experience is important to millennials. In fact, they expect gift card shopping to be a feel-good opportunity (as it should be). A recent CashStar report notes that personalization options can drive a good experience, as well as millennial purchase decisions. 50% of all respondents agreed that holiday-specific gift cards and personalized messaging (either on the card or in an accompanying greeting card) would get them to purchase more gift cards. Millennials accounted for 60% of those who would like a personalization option on the card itself.
For this millennial audience, card designs specific to holidays and occasions, personal messaging options (including photo and video options) and other personal touches are highly appealing elements.
Unique Gifting Experiences
Millennials actively seek out opportunities to be different, and this applies to gift card recipient behavior, as well. In addition to special personalization options, this group wants to feel that the gifts they receive—including gift cards—are unique. More than any other age group, millennials reported interest in receiving a personalized egift product. In fact, 64% of this group is intrigued with the combination of value and the ability to tailor the gift to one’s own personal preferences. When millennials receive a personalized egift product, they enjoy a thoughtfully selected gift while retaining the ability to select specific attributes (size, style, color, etc.) to meet their preferences.
Digital Ways to Connect
When it comes to buying and receiving digital gift cards, millennial preferences run the gamut. They’re interested in receiving gift cards through channels like email, texting and social media platforms, with a strong preference for receiving digital gift cards via email and text message. Social media is also a highly preferred channel for both giving and receiving; specifically, 60% of millennials show interest in gift cards that can be sent through a social media platform.
Contextual Commerce: Engaging with Today’s Consumer Where They Are
The future of gift cards is in contextual commerce, where consumers can seamlessly make purchases in the environments or social platforms they frequent. Consumers—especially millennials—are attracted to contextual commerce. As the data above notes, 60% of millennials said they would be interested in receiving a gift card through a social platform, like Facebook, and 54% would be interested in giving one.
Merchants should pay attention to these preferences and innovate within gift card programs to cater to increasingly sophisticated consumer behaviors. Contextual commerce options enable merchants to meet their most valuable customers on the channels where they are.