Adding Digital to Gifting

Gift cards continue to be a popular item for consumers. In 2009, Javelin Strategy & Research reported that 61 percent of U.S. consumers used gift or prepaid cards for purchases, and that number is only expected to grow. As more families connect via digital means such as email and social networks, the traditional plastic card, or paper gift certificate, becomes more difficult to give. It doesn’t fit into their daily digital communication.

In 2010, Retail Systems Research evaluated the Internet Retail Top 100 online retailers to see how well their gift card offerings enabled “digital gifting.” We quickly found that even the biggest retailers have a long way to go to make the digital side of gifting as good as when a shopper purchases, or redeems, a gift card or certificate in-store. Very few offered digital gift cards, essentially stored value against an account that could be redeemed online or in stores. Those that did, didn’t necessarily make it easy for either the gift giver or the recipient. However, even if you don’t have a digital gift card offering, there are a lot of things you can do to add a digital layer to your gift cards and certificates, and offer something special to shoppers who need a good gift idea.

Personalization in Print

If you enable online purchase of a gift card or certificate, where the gift giver purchases and prints out a certificate with a registered number or a barcode, one way to offer immediate differentiation is to enable personalization. This works in stores too, if you have a color printer. Customers can either choose from a preselected set of images or upload their own, and add both an image and a personalized message to either the certificate itself, or the note card that accompanies the gift card. Gift cards are already fairly impersonal, so adding the ability to personalize the gift card goes a long way towards making the giver feel like they’ve given something special.

Online Personalization

Even if you don’t have a way to personalize the card or certificate itself, you can provide an online forum for the giver to create a personalized environment for the recipient. Personalized environments include everything from personalizing an email sent by the retailer to the recipient, to creating a personal landing page and sending an email announcing the gift with a link to the personalized page. You don’t have to deliver the card or certificate online, but if you make announcing the gift a special occasion, it makes the gift itself feel more special, both for the giver and the recipient.

Email Confirmations

No matter what, the most important thing to offer is step-by-step communication for both the giver and the recipient. When a consumer orders a gift card and is not directly responsible for delivering the card, you have to provide him or her with the reassurance that not only has the order been received, but the card has been sent. And if you provide an online landing page announcing the gift card to the recipient, the sender should be notified that the recipient has viewed the announcement. Then, both the giver and recipient know that the card is on its way, and there are no awkward moments where the gift giver is anxiously waiting for an acknowledgement from a recipient who never received the gift.

Many Opportunities for Value

Providing this kind of digital layer to gift cards not only enhances the experience for giver and receiver, it also provides retailers with a way to increase their knowledge about customers. Email addresses, celebratory occasions and dates become opportunities to drive more business in the future. If you offer to remember the recipient and the date with a promise to send a reminder the next time around, you’ve got a chance to build repeat business from someone who may not already be a customer. If you give prominence to an email opt-in on the recipient’s announcement page, you have an opportunity to build your list and capture additional (and repeat) business from the recipient, beyond redeeming the gift card.

Gift cards can be difficult for retailers, difficult to keep track of, difficult to ensure they are redeemed, difficult for accounting. But they’re here to stay, and only growing more popular over time. However, done right, their benefits can far offset their hassles.

Nikki Baird is a managing partner at Retail Systems Research, LLC, a market intelligence firm specializing in retail technology. Baird covers topics such as loyalty, promotions, and payments as part of her focus on the retailer-customer relationship. To learn more about RSR and download the 2010 digital gifting report, visit