When merchants add digital gifting capabilities to their online stores, the benefits are clear: it can increase shopping days around holidays, it can bring in new shoppers, and it can help eliminate gift buyers’ shopping or shipping anxiety. So it’s little surprise that what was an already enormous $653 billion gifting market in 2020 is on track to increase 25% by 2024. But it is surprising that only about 2% of retailers believe they are taking full advantage of these opportunities with mature gifting capabilities. A brief course in digital gifting 101 can help!

Digital Gifting Basics Cover

Continue reading to learn more about what digital gifting is, how it works, and the potential benefits of implementing a digital gifting strategy for your business.

What is Digital Gifting 101?

At GiftNow, we think of digital gifting as an expression of appreciation or affection that is delivered via a digital experience—be it a gift card, an email, text, QR code, or other form. And it comes with significant advantages over traditional gift giving.

Digital delivery empowers buyers to send a gift instantly, from wherever they are. It unlocks personalization opportunities through video or written messages. And it allows recipients to modify or exchange gifts—before they ship.

Self Shoppers vs Gift Shoppers

Most retail websites are designed to help people shop for themselves, without considering gift shoppers. The fact is, there are two distinct personas, and they couldn’t be more different. Consider the start of their buying journeys:

  • Self shoppers typically need a particular item and go to a retailer looking for it.
  • Gift shoppers often needs an item they haven’t yet determined—they simply need something.

Even if both personas know the item they want, the differences remain. The self-shopper knows their own size, color preferences, and shipping address, but these factors often aren’t known to a gift shopper.

Digital gifting can effectively remove the barriers gift shoppers face because it allows the recipient to fill in the gaps—entering their own shipping information, or even modifying their gift before shipping. Now the unknowns of shipping addresses or delivery timing that could lead to abandoned carts are circumvented, allowing gift shoppers a smoother path to purchase.

Digital Gifting: How It Works

A digital gift can take different forms, whether it’s a gift card, a QR code, or a link messaged to a recipient via email or text. Whatever the delivery method, digital gifting brings twice the excitement for the receiver: first with the digital unveiling of a gift, and later when the physical gift arrives at their door.

For instance, say a gift shopper buys a shirt for a friend using GiftNow’s digital gifting platform. At that moment, the gift recipient gets a delightful digital unboxing experience, including an image of the shirt and a video message from the sender.

Gift card personalization

Next, the recipient decides if they want to keep the gift as-is, or change the size, color, or other factors. When they have the perfect gift, they enter the shipping address, and what was once a digital concept gets sent to them physically.

It’s all about decoupling the delivery of the gift from the shipping of the physical item—and it opens all kinds of value, from converting last-minute gift shoppers to allowing for more economical shipping rates.

Benefits of Digital Gifting

1. Digital Gifting Helps E-commerce

The pandemic proved that, while we couldn’t be together in person, people and businesses relied on sending gifts digitally for making and deepening connections. Beyond that era of usefulness, digital gifting continues to fill that role, and offers numerous benefits to merchants e-commerce strategies:

  • Hook new customers: Any digital gifting transaction gives a merchant two new potential customers—the giver and the receiver. The receiver may then opt in to marketing promotions.
  • Sell at the last minute: Without shipping cutoff dates, digital gifting can bring last-minute shoppers. It can even add shopping days to the year, including any major holiday.
  • Create new selling opportunities: Savvy retailers can use social media to draw in spontaneous gift shoppers around a minor “holiday” like Bosses Day or at graduation time.

2. Digital Gifting Fights Shopping Cart Abandonment

Shopping cart abandonment is an all-too-prevalent concern for online retailers, with a whopping two out of every three shopping carts abandoned. For gift shoppers, a cause for shopping cart abandonment can be unknowns about shipping address, size, or color preferences—or concern that the item won’t arrive in time.

Fortunately, with digital gifting 101, there are simple steps you can take to reduce shopping cart abandonment. Digital gifting and e-gift cards can help solve the following issues:

  • Help reduce shipping costs by sending an e-gift card for free, or a digital gift by an economical shipping method (the recipient gets their digital gift announcement right away)
  • Avoid complications at checkout because the gift recipient fills in their own details
  • Remove shipping deadlines and the need for express shipping from the transaction when you send the e-gift card or digital gift right away
  • Eliminate the hassle of returns when recipients can choose or customize their own gifts

3. E-Gift Cards Can Increase Customer Retention

Gift cards can be a versatile tool to boost customer retention, and many retailers use them as a part of their loyalty programs. As a loyalty program member makes retail purchases and racks up points, sometimes across several related brands, they can earn a gift card. Another example is points earned on credit card purchases that accrue and can be redeemed for a gift card.

There is ample opportunity for clever strategies for customer retention and promotional incentives like “spend $X amount and earn a gift card,” or campaigns to generate social media follows and likes by offering gift card prizes. Gift cards can be used to appease unhappy customers, and merchants can offer an exclusive discount when customers pay with gift cards.

What are E-Gift Cards?

Traditional e-gift cards are simply codes sent via email, text, or other digital means that are redeemed to make a gift purchase, whether online or in a store. But today’s e-gift cards have blossomed into something  more innovative, with the digital equivalents of wrapping paper and experiences that turn a potentially transactional exchange into something far more emotional—like eye-popping graphics and animations, or personalized video messages from gift givers.

But e-gift cards are not just for gifts. Some merchants use digital gift cards internally to reward employees. Others—like luxury retailers who have concerns about diluting their brand—will even use e-gift cards to “have a sale,” without having a sale. You can hold a promotion with a discount such as “buy a $100 gift card, get a $20 gift card (that expires in 90 days).” And digital gift cards make even more sense when you consider this: If you don’t offer one, you’re competing not only with direct competitors, but also all merchants who do offer gift cards.

Promoting E-Gift Cards

Merchants don’t tend to prioritize gift cards and promote them, but it’s a mistake to relegate them to a link at the footer of an online store. Gift cards are not only for big holidays; they’re an evergreen opportunity. So make room for them above the fold on the website. Or consider putting a button on the product detail page: “Still can’t decide? Give a gift card.”

Gift Card on navigation

Retailers are shifting from overlooking gift cards because they aren’t physical merchandise to viewing gift cards as products. From there, you can plan gift card merchandising, messaging, and marketing accordingly. Part of that may be marketing digital gifting and gift card services to gift givers in locations other than your own retail website.

Personalizing E-Gift Cards

Legacy gift cards get a bad rap for being impersonal and transactional. But today’s e-gift cards allow senders to add personalization and emotion to the gifting experience. You can add a message to an e-gift card by recording a video for the recipient, or select from delightful, occasion-based designs. The idea is to give an experience, rather than transferring a dollar amount. If all you want to do is transfer money, there are more ways than ever to do it. But if you make it magical, then it’s a gift.

Reducing Fraud with E-gift Cards

Like many popular digital services, e-gift cards are a growing target for scammers and fraudulent activity. So when you’re adding e-gift cards to your store’s offerings, make sure to choose a gift card provider that handles risk management components related to their digital gifting service.

Physical Gift Cards

Despite the ease of digital gift cards, physical gift cards remain popular—and for good reason. Physical gift cards work well for in-person gift giving, especially if they can be printed on-demand, or adorned with personalized messages and photos. But they do have some drawbacks like not being replaceable if lost, and generating plastic waste. They’re also subject to shipping times and rates if you’re not buying them in person. So it’s important for retailers to also offer digital gift cards as a quick, convenient option, and to benefit from every last shopping day.

gift card graphic
Gift cards can increase customer retention

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