Savvyseo, Author at Savvy

Gift cards in 2023: What’s in store for the future?

Posted on January 4, 2023February 24, 2023 by Savvyseo

Whether you are a retailer, a hotel manager or a restaurant owner, you’ll appreciate that your business hits many peaks throughout any given year; from Valentine’s day to Mother’s and Father’s day, to Black Friday and everything in between, reaching an almighty crescendo with the Christmas season.

This continuous series of dates in the shopping calendar means retailers need to stay two steps ahead at all times. With that in mind, we’re sure your plans are already in motion for the unchartered territory of 2023. But what exactly might this fresh new year have in store for the gift card industry?

A snapshot look at 2022

Before we bowl straight into 2023, let’s reflect a little on what 2022 looked like. 2022 certainly brought an entirely new set of challenges. However, it was arguably the first year that we felt far away enough from the pandemic to be able to move on with a sense of normality.

As a result, the gift card market had another successful year following the massive surge it experienced back in 2020 when consumers were using gift cards as a way to treat loved ones when we were unable to meet face-to-face. Here is a quick look at the events and themes that defined the gift card industry in 2022.

Cost of living crisis

The topic that dominated press headlines throughout much of 2022 is the cost of living crisis. This is something that is being felt worldwide. With essential outgoings such as fuel costs, energy bills, food and mortgage interest rates rocketing in price, many households are really feeling the financial pinch. So, will this have a negative impact on the gift card market and retail market as a whole? Or is there a hidden opportunity?

Well, in their Cost of Living Crisis report July 2020, the GCVA (Gift Card & Voucher Association) reported that while 23% of people plan to buy fewer gift cards as a result of the cost of living crisis, an equal percentage plan an increase in spending.

This doesn’t necessarily mean that 50% of people are feeling flush right now. When asked, people who planned on increasing their gift card spending said they wanted to avoid wasted spending, lower their overall gift spending, reduce the cost of delivery and avoid the impact of price inflation on physical gifts. With inflation not predicted to come down until mid-2023, we can expect these consumer behaviours to continue feeding into 2023.

B2B rewards market

2022 saw gift cards continue to gain popularity, especially within the B2B employee rewards market. More and more organisations are utilising gift cards as a way to offer immediate rewards to attract and retain their employees. With the pandemic causing many people to seek more value within their job roles, employers are making employee engagement and wellbeing a bigger priority than ever. This is something that reward schemes are playing into.

In fact, in the GCVA’s State of the Nation March 2022 report, research found that 39.5% of consumers had received at least one gift card over the last three years through work rewards or incentives. Not only this, but almost all surveyed gift card managers said that their company offers both B2B and B2C gift card programmes and the B2B side is where most of the activity lies.

What’s new for 2023?

2023 looks to be another strong year for gift cards. The market was estimated at $414bn in 2021 and is projected to reach $640bn or potentially even $1.4 trillion according to Research and Markets, so the upward trajectory is clear.

So, what are the trends and key focus points that we can expect to see in 2023?

A continued sustainability drive

Of course, a focus on sustainability is nothing new. But it’s something that the majority of industries are making a priority in 2023 and beyond. The same can be said for the gift card industry.

Global branded payments leader Blackhawk Network is leading the way by providing more environmentally friendly card products and pledging to convert the majority of its gift cards to eco-friendly, biodegradable and paper-based materials by the end of 2023. In the next year, we predict that we’ll see many retailers continuing their recent trend in reducing and eliminating their plastic PVC gift card products and replacing them with eco-friendly alternatives. In doing so, they will win the loyalty of eco-conscious shoppers.

The continuing shift from physical to digital and rise of B2B

Digital gift cards have really built up momentum over the last ten years in particular. Online shopping habits are at an all-time high, with retail eCommerce sales set to soar from about 5 trillion US dollars to just over 8 trillion dollars by 2026.

The instant gratification of a simple click has conditioned shoppers to become rather impatient. Whether it’s next or same-day delivery or click-and-collect options, we’re simply not used to waiting for our shiny new goods anymore! Digital gift cards offer that instant gratification experience. Last minute birthday present to purchase? Forgetful shoppers can buy a digital gift card online and it can be sent and spent on the very same day.

The ever-improving array of B2B platforms in the employee benefits, rewards and incentives space is continuing to drive new use cases for gift cards to help solve customer acquisition and retention initiatives. This space shows no sign of slowing down, 2023 presents further opportunity for brands to attack.

Increased focus on fraud management and cyber security

GCVA’s State of the Nation March 2022 report also found that security and fraud management remains high on the gift card manager’s agenda. This is an ongoing battle with no end date and evolves constantly as the attack vectors vary almost weekly.

Elder fraud in the US and the UK has become a real problem. It has forced brands to make every possible effort to protect vulnerable customers. While the tactic is especially nasty despite being somewhat low-tech, it has now reached the point where various states in the USA have reacted with legislative vigour. Expect this to continue, as gift card issuers will be forced to spend a lot of time educating customers and lawmakers alike.

Unfortunately, scammers tend to present a whack-a-mole-esque style of problem. As soon as you defeat one type of scam, another one has already popped up elsewhere. But with an increasing array of enhanced tools and services available from industry players including Savvy, these risks can be substantially mitigated.

See your gift card scheme thrive in 2023

What does 2023 look like for your business? Make it your year of success and let Savvy take your gift card programme to the next level. Whether you are looking for integrated gift card processing, end-to-end gift card processing or gift card analytics, we can help.

Savvy has committed to delivering more platform and roadmap enhancements in 2023 than we have ever delivered before. We’re taking some big steps forward. Our new tools and functionality are all aimed at one thing – helping our customers maximise their gift card programmes and win!

2023 can be the year of bringing your programme data to life and using it to drive your business forward, accessing new distribution channels and evolving your gift card programme to be more flexible and agile than ever before. All you need to do is contact us at Savvy.

Tapping into the B2B rewards market

Posted on December 16, 2022January 26, 2023 by Savvyseo

There’s not a lot that the COVID-19 pandemic didn’t affect. It changed the way many of us think and feel about life and this fed into consumer and employee attitudes towards businesses and organisations. People were left craving connection and a need to feel valued by the companies they work for and the brands they spend their hard-earned money with.

A 2021 Mastercard study revealed that 74% of consumers are more likely to buy from brands that strived to provide excellent care for customers during the pandemic, reinforcing that a customer-centric approach is more important than ever before.

Employees in particular are rethinking their purpose and seeking more than just a monthly paycheck from their employer. As a result, reward and recognition in the workplace continue to increase in significance. In fact, organisations that reward and recognise employee success have 14% better employee engagement, productivity and customer service than those without. Plus, they have a 31% lower employee turnover.

These attitude shifts over the last few years in particular have driven more organisations to invest money into employee benefits, customer rewards and B2B schemes. As a result, the B2B rewards market has become an incredibly profitable avenue for retailers with gift card programmes.

Gift cards and the B2B reward market

Whether an organisation is looking to reward their employees or a business is looking to reward its loyal customers, gift cards offer the choice and flexibility needed to please the masses so that all different walks of life can be catered to effectively with one product.

Let’s say for instance that an organisation rewards their workforce with points each month that can be built up and exchanged for a gift card via an employee benefits platform (such as Perkbox). By integrating your gift card with a platform like Perkbox, you get your name among the brands that employees can choose from when investing their points.

In a customer sense, let’s say that a bank, for instance, wants to reward a customer for opening a second account with them. Or perhaps an insurance company wants to incentivise prospective customers to choose their insurance policy. Your gift card could be that reward or incentive offered to clinch the deal – a win-win for everyone involved.

In their State of the Nation March 2022 report, the Gift Card and Voucher Association (GCVA) found that over the last three years, an almost equal proportion of consumers received a gift card as a reward or incentive from a company as the proportion that had purchased gift cards for themselves. With that in mind, there’s no denying that the B2B channel for gift cards is going from strength to strength and could be well worth your investment.

Why work with B2B reward schemes?

Still need more persuading? Businesses and organisations can reap many benefits from being a part of the B2B rewards market. Here are a few of the core advantages to whet your appetite.

Increase your brand awareness

Sure, it sounds pretty obvious but it’s important to recognise that connecting with other businesses and putting your gift card amongst different B2B distribution channels will in turn increase your brand awareness. When an employee is browsing an online ‘catalogue’ trying to decide which reward to choose, just simply being among the options can be hugely beneficial for brand exposure – particularly for smaller or growing brands.

Gain new customers

And you never know – that employee browsing the online ‘catalogue’ may just decide to redeem their points on your gift card. Offer them a frictionless customer experience and a fantastic product or service and you could have another happy, loyal customer to add to your roster for the foreseeable. Put simply, by putting your name among the options, you give yourself the opportunity to win new customers and re-engage those that have bought from you in the past but have since fallen off the radar.

Get ahead of your competitors

Whether you are a fashion retailer, a restaurant chain or a gym, you’ll almost always have competitors in your space to keep an eye on. Working with B2B reward schemes can add another string to your bow, take your business to potentially unchartered territory and put you ahead of the game. On a shopping high street or a Google search, your business will naturally be competing against tens to hundreds of competitors, but on a B2B reward channel, you may find it’s a naturally less saturated market, giving you a greater opportunity to stand out.

How Savvy can help

Tempted to start exploring the B2B rewards market? At Savvy, we have all the tools to help you access these B2B channels and get started with this new venture. With the Savvy platform, you can set up new partners with both speed and ease and use our gift card analytics services to measure and maximise how your gift card is performing.

Want to learn how you can win with Savvy? Get in touch today and let us show you how we can take your gift card programme to the next level.

Build it or buy it? How to approach selling gift cards online

Posted on December 5, 2022January 26, 2023 by Savvyseo

It’s taken some time and painful mistakes along the way, but retailers and businesses have now increasingly realised that purchasing a gift card online doesn’t fit very easily within the traditional website checkout process.

The majority of today’s shoppers are pretty familiar with shopping online. In fact, in 2021, over 2.14 billion people shopped online. That’s 27.6% of the world’s total population! And because we can purchase pretty much anything online and are continuously bombarded with an enormous amount of choices, our tolerance for a bad checkout process is pretty low. The average cart abandonment rate is just under a whopping 70%, meaning that around seven out of 10 shoppers won’t complete their transaction.

For online retailers to stay up to speed with competitors when selling gift cards online and keep their shoppers from clicking the dreaded ‘X’ button, their checkout process needs to be simple, smooth and efficient. And this has been somewhat of an issue in the past when selling gift cards…

The dilemma

Put yourself in an online customer’s shoes. They want to purchase a coat from your clothing website. They add their desired product to the basket, proceed to checkout, enter their card and delivery details and complete the order. Simple.

Let’s say that they also want to purchase a gift card for a friend or family member. They add the gift card to their basket and you now need to take additional details from them before they can proceed to the checkout. Which design of gift card would they like? What value do they want to load onto the gift card? Do they want to add a gift message? Is this being sent to the delivery address or email address associated with the coat purchase or directly to a lucky recipient? Is it to be sent immediately or delayed until a later date?

In short, it quickly becomes clear that a gift card is a very different type of product. Therefore, it should not be approached in the same way as other products and integrated into the normal checkout process. Even if your customer is only purchasing a gift card on your website as a standalone purchase, a gift card requires an entirely different customer journey from the one offered with a normal online checkout.

This dilemma throws up a very important question. When selling gift cards online, do you shoehorn gift card sales into your own website and run the gauntlet of these issues, or do you outsource to a specialist third-party provider instead?

Developing in-house: pros and cons

If you want a job done properly, do it yourself right? Or do the nuances of selling gift cards online require that expert touch? Let’s discuss the pros and cons of choosing to sell gift cards ‘in-house’ via your own website platform.

It costs less

The biggest perceived advantage is lower cost. Theoretically, you absorb an upfront build cost and then it more or less has no real running costs. It’s fixed. The outsourced model on the other hand will have ongoing recurring costs, while in-house is a one-off cost that you won’t have to worry about unless you decide to make changes and improvements over time.

Flexibility and freedom

By taking the development in-house, you can enjoy the flexibility and freedom of doing everything yourself. You can boundlessly customise how the customer journey will look and feel without having to accept an outsourcing platform’s template. You decide how much money to put into the project and set the deadline for completion.

Of course, there are downsides to doing it all yourself. If things go wrong, it’s very much your problem to solve. Even regular maintenance can quickly become a time and money pit. However, if you have a solid brand and feel strongly about being in control of this, developing in-house may be the more attractive option.

Increased exposure to fraud

Unfortunately, developing in-house offers you a lower level of fraud protection against fraudsters using your gift cards as a way to launder stolen credit cards and illegal funds into third-party items. This is a huge advantage of outsourcing as you transfer the risk and sleepless nights to your specialist partner. Luckily they sleep pretty well as they are built to combat this better than almost any retailer can hope to match.

To explain this point better, let’s take Payment Service Providers (PSPs) as an example. At one point in time, it was optional for retailers to use PSPs on their websites. By using a PSP, retailers were outsourcing their credit card acquiring risk to a third-party company that could not only guarantee that they would be Payment Card Industry compliant but also be able to spot any fraudsters and ensure the retailer would stay protected.

This obviously came at a cost to the retailer. Those who didn’t want to pay that cost believed they could protect themselves against fraud. Unfortunately, they soon learnt the hard way that they couldn’t. Fraudsters hunted down those retailers not using PSPs and targeted them with painful hacks where customers’ credit and debit card details were leaked from inadequately protected systems.

Today, no one uses in-house credit card strategies anymore. The very idea is almost laughable! PSPs have proved themselves as the only way to stay safe whilst taking payments online and the same can possibly now be said for the outsourced eGift card providers.

Outsourcing development: pros and cons

So, what about the other side of the coin? Developing in-house comes with its own set of challenges but is outsourcing really the better option? Let’s take a look at the pros and cons.

High security

As previously mentioned, outsourcing your online gift card sales to specialists is by far the safer option. These providers have curated their software to offer the highest level of protection and they are so confident of this, that they take all responsibility for any fraudulent activity. Should anything go wrong, they take the hit and not you. You’re protected.

This level of financial protection as a retailer really is worth its weight in gold. These businesses depend on keeping their systems (and therefore you) airtight and 100% secure.

Fully optimised customer journey

The outsourced providers’ entire R&D budget is focused on their platform to continually drive gift card sales – the in-house approach can’t hope to keep pace with that level of focus. As a retailer, you’ve got 101 things on your radar. Ensuring that your online basket customer journey is continuously optimised and up to date just for gift cards possibly won’t always be high up on that to-do list. However, when you use an outsourcing platform, this is a permanent number one priority.

Think about it – these platforms exist solely to help you sell gift cards. It’s their area of expertise! They do everything they can to add value by giving your customers the best purchasing journey possible and this is always evolving to meet increasingly demanding consumer expectations. New consumer trend on the horizon? Outsourcing platforms are likely to be the first to develop it and embed it into the platform. This means you get access to the latest features and capabilities automatically.

They’ll know exactly the right process to offer when both purchasing and receiving gift cards along with presenting how a gift card is sold and understanding the optimum amount of steps a buyer should go through when purchasing in order for you to secure the highest conversion rate and stay in-line or ahead of your competitors.

Ongoing costs

The only potential downside to opting to outsource is the ongoing costs associated, whether that’s subscription-based costs or performance-based costs where you will have to pay a commission on your gift card sales. You may also find yourself paying for platform upgrades and additional features over time although many outsourcing platforms will automatically add some of these free of charge.

Building the solution in-house can be the cheaper option – but will a potentially subpar digital gift card process cause your cart abandonment rates to rocket and your gift card sales to drop? Will your internal fraud solutions be robust enough to protect you? Will you suffer higher than necessary failure rates from accidentally rejecting genuine cardholder payment details? This is something that must be considered when retailers are weighing up whether outsourcing is worth the investment.

Which option is right for you?

In today’s gift card landscape, outsourcing is now almost always the best option. The pros totally outweigh the cons. You’ll save yourself some potentially enormous mistakes and security breaches by relying on a third-party company that is built to protect you from this risk.

In fact, two out of three of the largest UK retailers are now estimated to follow the outsourcing model. This is evidence enough that as the market has grown and the retailers are selling more cards than ever – particularly online – retailers have embraced the outsource model for the advantages it offers in a continually scaling situation, whilst being highly sensitive to fraud and evolving enhanced customer journeys.

Let’s face it – you can’t always do everything well! Why not focus on your core business of being a retailer and opt for the outsourcing option? By working with us here at Savvy, you can access our connections with the best outsourcing providers. They will work with you to ensure that you are offering the best possible gift card experience for your customers when selling gift cards online, all whilst protecting your business and your customers.

Interested in learning more about working with us and how you can win with Savvy? Get in touch to request a callback and let us put you on the road to success!

Maximise your gift card sales this Black Friday 2022

Posted on November 16, 2022February 24, 2023 by Savvyseo

Black Friday is one of the biggest days in our retail calendar and a must for any bargain-seeking shoppers. This year, Black Friday is set to fall on the 25th of November 2022 with its online counterpart Cyber Monday following on the 28th of November and US shoppers are set to spend roughly $158 billion during this time, with UK shoppers estimated to spend £3.95 billion.

For UK shoppers, spending is set to drop this year compared to 2021’s Black Friday. With the cost of living crisis dominating the press headlines worldwide and tightening purse strings, this drop in spending may not come as a huge surprise. Whilst consumers in the UK still want to shop this Black Friday, they’re looking to get more for their money than ever before.

It’s not the same story globally though. Research has shown that one in five US shoppers plan to increase their Black Friday spending this year, eager to grab the opportunity to shop discounted products in order to maximise value.

So, how can you attract these price-conscious shoppers this Black Friday and maximise your gift card sales? Savvy explains how you can win this spending season.

Gift card purchasing behaviours for Black Friday 2022

You know the score – in order to effectively market your gift card programme and maximise sales, you must first understand your customer and their behaviour. And when it comes to Black Friday shoppers, there are a few different customer types that you can expect to need to cater to.

Early Christmas shoppers

Black Friday has certainly pulled the start date for Christmas shopping forward a week or two. Whilst many people can be found pounding the high street and emptying retail shelves on Christmas Eve, the organised amongst us will be ready and waiting to spend come Black Friday with their gift list in hand.

In fact, 38.1% of people in the UK start their Christmas shopping before November, and 69.8% before the 1st of December. In the US it’s a similar story, with 60% of consumers organised enough to start before December. Plus, with living costs rising, many shoppers this year will be hoping to spread out the cost of their Christmas shopping and make use of discounts while they’re at it.

How to attract early Christmas shoppers

So, what kind of deals are these customers after and how can you put your gift cards at the top of their Christmas list? Simply offering a discount on your gift cards is a great place to start. For instance, if a customer purchases a £50 gift card, they pay just £45. If a customer purchases a £60 gift card, they pay just £52.

By increasing the discounts the higher the gift card value, you encourage a higher spend and give customers more bang for their buck. Set your Finance Director’s mind to rest by ensuring you track every promotional gift card through its redemption lifecycle so they can actually see the resulting customer spend and value that discount offer created. They’ll probably ask you why you didn’t sell more of them!

When marketing your gift card promotions to early Christmas shoppers, focus on the element of choice for the recipient. These are shoppers who are eager to spend time getting their Christmas gifting right. A gift card is a gift that cannot miss the mark. It’s free money in the recipient’s pocket.

For gift-givers that want to ensure a worthwhile gift that won’t be getting returned on Boxing Day, your gift card is the way to go. Gifting unwanted presents can be a real worry. Over a third of shoppers planned to return a gift back in January 2022. Not only is this a worry for gift-givers, but it has a financial impact on retailers and an impact on the planet as shipping items back and forth creates unnecessary greenhouse gases. Gift cards successfully combat this with the level of choice that they offer.

Thrifty shoppers

Of course, it goes without saying that thrifty shoppers aren’t going to let Black Friday pass them by this year without taking advantage of slashed prices. These are the consumers that consider Black Friday shopping a sport. They will spend hours finding the best prices across the internet and in-store for the products that they want. So, with discounts a-plenty across the board, how can you make sure your gift cards stand out amongst the competition?

How to attract thrifty shoppers

Thrifty shoppers may not have gift cards at the forefront of their minds. They may be on a mission to purchase a particular product. Got any best-sellers that you’re expecting to fly off the shelves this Black Friday? Offer a free gift card of a certain value with specific purchases or if a customer spends over a certain amount online or in-store.

Offering gift cards as a promotion rather than a discount may just give you the edge over a competitor with equally competitive deals. It also rewards loyalty and builds a relationship between you and that customer. Plus, with free money in their pocket, that customer is likely to return in the future to make an additional purchase using said gift card.

You should also consider applying terms and conditions on gift cards purchased during Black Friday that stipulate that they can only be spent after Black Friday, or even extending it out until after Christmas. This way, you can be sure that you will regain some value on the spend rather than it being spent during peak sales periods.

If your gift card systems can’t support these types of capabilities, perhaps it’s time to consider better options. Savvy customers are winning when it comes to Black Friday and maximising gift card sales without impacting margins.

Direct cash-adjacent value is often higher impact than variable discounting. Get marketing in advance to capture thrifty shoppers at their research stage and put yourself at the top of their Black Friday hit list. You could even start your Black Friday gift card promotions early to tempt these well-prepped shoppers in before other brands start competing for their business.

Sustainable shoppers

For the sustainable shoppers amongst us, the packaging and delivery emissions that come with the consumer madness of Black Friday can cause heads to start spinning. In today’s consumer landscape, sustainable shoppers are an ever-growing part of any customer base. Every brand should be considering how they can attract these types of consumers, particularly during these peak shopping seasons.

How to attract sustainable shoppers

Digital gift cards offer a sustainable way for these shoppers to enjoy Black Friday sales without compromising on their ethics. Plus, research shows that shoppers prefer to do their Black Friday shopping online, so focusing on the online sale of your gift cards won’t go unnoticed.

With no physical product to handle or have delivered, digital gift cards have no carbon footprint. Not only that, but the level of choice they offer when gifted to a recipient reduces the risk of purchasing something unwanted, in turn reducing product waste.

A 2022 report found that there is a sharp increase in the number of people who have adopted a more sustainable lifestyle in the past 12 months, and this is increasingly seeping into buying habits. Sustainability is no longer a buzzword. It’s an important part of what many consumers are looking for. And these consumers seek to align themselves with brands that share their morals and values. By prioritising sustainability and using this angle to market your gift card programme, you unleash the potential to increase brand loyalty and win the return business of these shoppers for years to come.

Win with Savvy

It’s time to start doing everything possible to prepare your business for Black Friday. This Black Friday and every other day of the year, Savvy customers can utilise our complete gift card programme visibility and in-depth data analytics to help them maximise their gift card sales and understand their customers and their gift card (buying and spending) habits more than ever to ensure success year after year.

You can win with Savvy with our gift card processing and retail data analytics services – the perfect combination to help take your gift card programme to the next level. Want to find out how Savvy can help you to control and reduce costs, grow your revenue and improve your performance? Get in touch to request a callback and let us bring clarity to your gift card programmes.