#e-gifting

Increasing Customer Acquisition

Gifting is a unique scenario that provides retailers an opportunity to acquire two customers for each single transaction — the gifter and the recipient. While retailers have carefully calibrated their engagement and marketing to people buying for themselves, people get lost thinking about recipient preferences. Consider this: $44 billion remain unspent in gift cards since 2005. That represents a lot of people who never engaged with the brand/retailer or became a customer.

A recipient that has just received a gift (an actual item for free from someone she knows and trusts) is immediately put in a state of mind that creates the golden opportunity to convert her into a customer. A gift card (both digital and physical) can easily be set aside and forgotten about. But when someone receives apparel, jewelry, shoes, accessories, etc. through e-gifting and is instantly directed to an online store, she’s exposed to the retailer’s products right away. This touch point increases the chance of her becoming a repeat customer.

Boosting Sales And Average Order Value

Gift cards by design are available in pre-set denominations. A person giving a gift card will only have the choice of which level ($25, $50, $100, etc.) he thinks is appropriate. While an ‘easy’ solution, this doesn’t leave much room for the brand or retailer to upsell or upserve the gifter. Consumers are psychologically inclined to spend more than originally intended when setting out to buy a gift. With e-gifting, retailers can offer the buyer personalized higher-priced merchandise options just like a talented salesperson would do in a physical store, if he or she knew that a customer was looking for a gift.

A recipient that receives an item is more inclined to open her own wallet and purchase an additional item to complete the look. She’s also more willing to pay the difference for a more expensive item if she prefers that to the gift received. Retailers can make targeted recommendations that tap into a gift recipient’s needs and desires of the moment. There’s also an opportunity to offer sales promotions and discounts for same-day shopping that give e-gift recipients an incentive to buy more.

Mobilizing Brand Advocates

Psychologist George Silverman is most commonly designated the pioneer in the field of Word-of-Mouth Marketing (WOM). Brands that understand WOM can create strong advocates that promote their businesses organically. Nielsen research estimates that 92 percent of consumers trust WOM recommendations over all other forms of advertising. The implicit message one sends when purchasing a gift is: “I bought you this product that I think you would enjoy from a brand that we like.” It’s nearly impossible to replicate the credibility that comes from an endorsement of family and friends.

Item-level e-gifting arms retailers with the ability to stoke the WOM fire. It’s a sure way of reaching out to people who will love your brand. These people are friends and family of your existing customers and brought to you by them. Receiving an actual product that demonstrates thoughtfulness on behalf of the sender creates happy recipients and customers. This is especially true when accompanied with personalized touches such as e-cards, virtual wraps, voice and video messages and other extras that make the gift worth sharing and expressing gratitude for through social networks. Happy customers become advocates eager to share their passion for products and brands they love!

While gift cards may continue to be a core part of a retailer’s online offerings, e-gifting provides vast opportunities for brands and retailers to win new customers, generate more sales, and build better brand loyalty among new and existing customers. The retail landscape continues to evolve in ways that demand brands and retailers fundamentally rethink and implement new online strategies to compete. SmartGift is right in the center, driving gifting forward within the larger future of e-commerce.