In 2010 Starbucks was mulling a plan to offer e-gift cards via social media. It quickly decided that just incorporating them in a Facebook app would be clumsy for its customers, as the gift recipients would then have to "like" Starbucks, download and register the card if they wanted to retrieve their gift.
So the site opted for a joint venture with CashStar, Ryan Records, director of the Starbucks Card program told eMarketer as he described the launch and the program's quick success. With CashStar, someone can send a recipient a Starbucks product as a gift using only an email address or as a gift on their Facebook wall.
Better E-gift Cards: More Personal, Social and Mobile
Welcome to the next generation of e-gift cards.
They are remarkably similar to their earlier counterparts introduced more than a decade ago. Except they come with social media elements or mobile tie ins. Or just new technology to make their use easier. They are also far more customizable than ever before. In some cases, their special offers can be tied to QR code-based campaigns. CashStar, in fact, predicts more companies will merge these technologies, Gift Card Partners notes in a blog post. "Technologies like QR Codes will merge offline marketing and advertising to accommodate retailers’ need to bridge online and offline and consumers’ need for instant gratification."
Meanwhile, the fact that in the ensuing years people have become more comfortable with digital payments has sustained the relevance of online gift cards. As a result retailers are giving the technology second and third looks.
The 2010 E-tailing Group's annual merchant survey found e-cards were directly related to 15% of their sales. Another survey, by Javelin Strategy & Research, finds that online gift card sales are projected to reach $5.86 billion in 2014. Aite Group reports that the cash value on virtual cards will reach $10 billion in the U.S. in 2015, up from less than $500 million in 2010.
No Longer Standing Alone
The new generation of e-gift cards have also become more easily integrated into online campaigns, such as email marketing and social media promotions. The tie-in to email marketing is a natural one. Consider a trend that became popular during the 2010 holiday season. As merchants sent out their last-minute messages, they would include reminders to send e-gifts to people who were forgotten from the holiday shopping list, or perhaps had already given the viewer a gift - and gotten nothing in return. For instance, Responsys noted in a report [PDF] that:
On 12/22/10 Crutchfield sent the message: "It's not too late - email them a Crutchfield Gift Card"
J. Jill on 12/23/10: "Need a gift by tomorrow? Send the J. Jill e-gift card!"
J. Crew on 12/24/10: "Oops. Who'd you forget this year?"
They also - in keeping the daily deal-coupon esprit de corps - make it easy to tailor with discounts in the expectation that the recipient will spend more than the face value of the card, as they often do.
The Facebook Driver
Facebook has been the inspiration behind many of these campaigns - Starbucks' reasoning about it notwithstanding. For the 2011 Father's Day casual dining chain T.G.I. Friday's, as one example, rolled out an e-gift card via a Facebook application called Buy Your Friend a Beer. Any Facebook user 21 or older could download the app to send an e-gift card for a beer at any of the chain's 600 domestic locations. The offer lets people buy up to five beer e-gifts at $5 per drink.
It is, though, a multi-step process. You have to "like" the Friday's fan page on Facebook then place an order through a custom tab. The recipient must either print out the coupon or leave in on his or her smartphone to be redeemed.
Beyond that standard application, there are a slew of variations. Consider, again, Starbucks. Customers can now send e-gift cards through Facebook or email, redeem them at the company's online store or download them onto their mobile devices. It is using them tactically too, driving traffic into new marketing channels. For its 40th birthday it gave the first 600 people to check in via Foursquare a mobile gift card. Chef Marketer reports that in 2010 Starbucks customers loaded more than $1.5 billion onto their cards, an increase of 21% over 2009.
Gift Card Management Software and Solutions
Some avenues for marketers interested in e-gift card technology to consider are:
CashStar. A digital gifting platform for both B2C and B2B retailers. It includes fraud prevention features as well as analytics. Its B2B suite includes eCorporate Direct, a digital order entry system for managing bulk purchasing, and eCorporate Application Programming Interface (API), which provides third parties with a way to distribute large quantities of eGift Cards on demand.
Dimple Dough. A cloud-computing card management platform, DimpleDough is aimed at retailers and banks. Its platform integrates with processing, printing and fulfillment, and ecommerce partners as well as in smartphone apps and social media. Features also allow users to customize the offers.
GiftCardGreatness.com. A full-service offering from Smart Transaction Systems aimed at small businesses that want to sell gift cards online without the overhead of launching and managing an e-commerce site. Options include e-gift cards and m-gift cards.
GiftRocket. This offering lets businesses or individuals offer e-gift cards via email or a Facebook wall. The application sends the money via Paypal to the recipients, who redeem it through their smartphones. It uses a phone's global positioning system to find a recipient's location and then transmits the funds to their PayPal.
Giftango. The platform delivers e-gift cards to email and mobile phones. It is integrated with more than a dozen gift card processors.
Omnego. Provides white label mobile wallet and marketing platform offers. It is partnering with FuzeBuy to enable the delivery and redemption of gift cards from consumers' smartphones. FuzeBuy hosts online shopping carts, fulfills gift card orders and manages loyalty programs.