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www.IndependentRetailer.com MARKETING Gift Cards Build Loyalty
MANY RETAILERS are grab- bing an opportunity to attract new customers with a gift card program. These programs can build store awareness, capture the attention of new customers, and lock in repeat shoppers, say experts including aptly named, Rana Cash, who writes for the Atlanta Journal Constitution. These cards, which are essen- tially devoted debit cards, are set up with a predetermined cash value. Customers seldom use the exact sum, resulting in sales that total more than the preset amount, or if the card is not used up, one or more re- peat visits. That gives retailers a chance to form a bond with the customer. And a retailer can extend
that bond. Whenever custom- ers use up a gift card, give them a coupon for a store dis- count, say, half off any single item up to a certain value on a future visit. If the retailer is generally selling at keystone, at least there’s no money lost on the deal, and bringing the customer back into the store (hopefully to make more pur- chases) is invaluable. Statistics released in summer
by First Data, an information commerce provider, shows growth in these programs. The number of gift cards sold by re- tailers in the fi rst six months of the year increased 2.4 percent over the fi rst six months of 2009.
According to Mike Hursta, vice president of gift cards for First Data, “Establishing loyalty programs and reload and reg- istration sites, communicating to your consumers over email when they’ve registered a card, establishing a bulk sales pro- gram to make your cards more accessible, maybe at a small discount to get more cards out there on the street, these are the sorts of things that some of your competitors are doing. If you want to keep up with them, you should start considering that yourself.” Some independent retailer
associations such as the Amer- ican Booksellers Association and some hardware co-ops have gift card programs that make it easy to get started. And Rana Cash suggests that retail- ers can benefi t by teaming up to offer local programs for cards that are accepted by several re- tailers in the same area. “While individual gift certifi cates do well, particularly during the holidays,” she writes, “having a collaborative effort with like-
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minded shop owners is a bonus for consumers looking for ver- satility and a deal.” A future trend to watch:
several new retail support companies, such as Mocapay, are offering the option of us- ing smartphones as gift cards. Mobile gifting programs will let shoppers send digital gifts from their mobile phones to family and friends. Those who receive the gifts can then give a code to the cashier to redeem them. But whether plastic or electronic, gift card programs offer a marketing hook which small retailers can use to reel in loyal customers. ■
October 2010
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