September 16, 2008
Wanted: More Personalization in Gift Cards
By Tom Ryan
According to a new survey from the National Research Network, the perception that gift cards are impersonal is the top inhibitor for consumers purchasing gift cards, with nearly half of respondents citing that as a factor.
Keith Maladra, vice president of consumer intelligence at the National Research Network, told Brandweek that providing greater personalization around gift cards would help, but it would require a better understanding of the target audience and what appeals to them.
“For instance, gift card providers could customize gift cards for children by placing an image of a ‘cool kid’ on the card,” he said.
Walmart, Macy’s, Toys”R”Us, Starbucks and Dunkin’ Donuts are among those offering
personalized gift cards. It’s done primarily via the web, allowing consumers
to apply photos or other images to the cards. For example, Target’s website
now has 35 customizable gift card options – including some with lights and
sounds – and groups them by theme (birthday, wedding, baby, puppy) and recipient
(bride and groom, expectant parents, him, her, kids of all ages.)
Brandweek noted that consumers spent nearly 18 percent of their 2006 total holiday merchandise gift expenditures on gift cards, up from 13 percent in 2005, per the International Council of Shopping Centers.
Among
other findings in the study:
- Discount stores such as Walmart and Target were
the most popular gift card benefactors, with 42 percent of respondents reporting
purchasing a discount store card in the past year. Restaurants came in second
(26 percent), followed by clothing stores (21 percent); - More females (60 percent)
than males (44 percent) reported buying cards in the last year; - The average
number of gift cards consumers receive tends to correlate with household
income. As household income increases, consumers tend to purchase more gift
cards; - Christmas
and birthdays were cited as the top occasions for gift card giving; - This holiday
season, younger consumers are expected to buy gift cards, with 78 percent
being between the ages of 18-24; - Fifteen percent of gift card recipients spend less
than the total gift card amount.
Discussion Questions: Do you think greater personalization will provide another boost to gift card sales? What other ways can retailers drive gift card sales for the upcoming holiday season?
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Home Depot has a unique tape measure/level gift card which is an excellent tie in. I have also seen Disney license gift cards at Walmart and Toys “R” Us. These work well, especially when giving a gift to a child and you know what he or she is into.
The next wave of gift card personalization will be through packaging–packaging not only completes the presentation, but in a unique way that conveys the sentiment behind the offering. Integrated card packaging is definitely in demand. Our customers’ response to our new patent-pending package designs are evidence of that need.
The poorly documented survey results referenced in this article are more spin that not. In my non-scientific research (I talk to people) right now the area of gift card merchandising is in serious trouble on two major fronts. 1. Not many young people think gift cards are remotely cool–they LOVE to shop and to actually pick out and buy gifts for their friends–and 2. with many retailers and restaurants in financial trouble gift cards are more and more perceived by givers and receivers as an iffy investment. People question whether their gift card gifts will be honored.
The gift cards that will remain popular as presents this year are for gasoline, Walmart, Target and grocery stores from Kroger to Whole Foods. These do not require a personalization gimmick but that might make them more fun.
I love getting gift cards, but as a consumer, I’m not sure it really needs to be personalized. A gift card is a gift card, is a gift card.
The most important thing to remember when giving a gift card is to get the store I want it from right! A personalized gift card to Home Depot, with your mug on it, when I live in Manhattan doesn’t make a lot of sense. A card to the store I love shows you put some thought into it, and that’s the personal touch I want.
It is interesting that while their “impersonal nature” is one of the big inhibitors, it is also probably one of the biggest reasons people use gift cards. By that I mean, you don’t have to know what the recipient really wants in order to give them a gift card. As long as the card’s sponsor offers a decent variety of products, the recipient can use it to buy what they need.
I imagine this is the very reason many people prefer to give gift cards. The challenge is that where the line lies between too impersonal and not personal enough is a personal preference and is only important in the eyes of the recipient.
The economics of gift cards for retailers is great. When the redemption is less than the card value, the retailer makes out. When the redemption leads to additional sales, the retailer makes out. Rarely is there a redemption exactly matching the value.
Personalized gift cards have wide availability. I often see them and think who I know that they would match. For the future, the more personalization, the more likelihood that someone will buy them without the cop-out feeling.
In order to further spike the sales of gift cards, the retailers could offer discounts on the cards. Therefore the giver gets to give more value than they would otherwise in selecting a gift and the retailer wins on the breakage and additional sales.
Other opportunities may be gift cards for holidays that people don’t usually buy gifts. As a grandparent, I may be inclined to purchase a Halloween gift card for my grandchildren. Or, retailers could sell gift cards like greeting cards, “just thinking of you,” “hope you are feeling better,” or “congratulations on graduation.”
If you put thought and effort into a personalized card couldn’t that energy go towards picking out an actual gift?
Sounds like a fine idea. Any personalization for the gift card recipient makes the gift “just for them” adding a nice touch to a fairly cold gift gifting medium. The Target line of cards is fun and varied. It would be nice to see more retailers adding personalization and a bit of playfulness to a boring piece of plastic.
This seems to be a worthy idea–making gift cards more personal–though the thinking seems to be more about form (i.e., packaging and images) versus substance (multi-merchant, added value, real customer utility).
As long as gift card personalization is impersonal (though the Home Depot example above is clearly an exception) it will be a blip versus a spike in terms of effect.
I think customization of gift cards is a brilliant idea. Especially for younger recipients the thought of having a card personalized just for them is pretty exciting. I can imagine how excited the grand kids would be about having a card that is “theirs” and was made “just for them”! It would be a akin to having their own credit card.
It seems that it greatly helps transform a gift card from being thought of as “I couldn’t figure out what to give you and I didn’t want to spend the time trying” to “I care so much about you that I had a special, personalized card made just for you.” If done correctly, it should shout out “you’re so special that I went to great lengths to find the perfect gift just for you”!
And we already know what’s in it for the merchant issuing the cards, so it should be a win win.
The packaging of the gift card is where the opportunity is…for a child, a little stuffed dog holding it in its mouth. For adults, cards in a gift bag with a cute symbolic item….
What people dislike is the non-personalization of the gift. Christmas has become a just pass the cards around day. So tying the card to a package to be opened would be a winner.
The more retailers allow customization of gift cards, the more they will sell. It’s interesting to see the opinions that different age groups have towards gift cards. Younger consumers consider them to be a great gift, in that they allow the user to get exactly what he/she wants. Older consumers still consider them to be impersonal, in that they don’t require the thought or effort put forth to buy a “real” gift and they identify the exact value of the gift.
Gift cards are by definition impersonal. They are a solution to the problem of not knowing what to give someone. They are also a more efficient consumption process, making the recipient the decider. In many cases, card buyers do not know who will be the recipient.
So, personalizing cards will probably only work for a small segment of holdouts–those who believe that a picture of the recipient or themselves represents personalization. I suspect that most holdouts still want an old fashioned message that can accompany a gift, you know, like “I thought you might like this.” Definitely sounds like an opportunity for new research.
Gift cards are a great way for any retailer to enlarge their customer base. Gift card recipients often find that the cards have fees deducted and that many stores won’t issue cash refunds, either, even if the purchase is less than the amount left on the card. So gift cards are an opportunity to convince folks just how unpleasant a retailer can be. As far as personalization is concerned: sure, why not?
By the way, even if your store’s web site doesn’t sell merchandise, it’s easy to sell gift cards on any site, with almost no programming or operating cost. Yet almost every retailer who has a web site with no merchandise for sale refuses to use that site to sell gift cards.
Personalization alone isn’t going to drive enormous increases in gift card sales, but it is suitable as part of a suite of services or promotions.
Many stores with higher volumes currently produce numerous themed cards. This has likely helped repeat business with those who buy gift cards frequently for the same people. For other merchants, it’s simply not practical.
For retailers who do offer customized cards featuring personal photographs, the service often runs $5 a pop. In this economy, the typical consumer will probably skip it – especially if they need to purchase numerous cards. On the other hand, if the service can be underwritten by the merchant, there may be significantly more appeal. Free shipping is another valued service.
Gift cards are most popular for recipients who the giver doesn’t know well or a person living at a distance – especially children, whose size or current likes are difficult to track. It’s also good for the person who has everything. It even works in personal relationships where the gift of a valued experience can be given, like music downloads, a golf outing, travel, spa visit or dining occasion. Cash would never provide the same experience and emotion, nor would a gift that has to be returned. Stores can help with premium packaging – not just pretty wrapping but functional items (like a wallet, card case or stuffed animal) that become an incremental sale.
Many stores will incent with a value-added offer to encourage early holiday or volume purchases of gift cards, i.e., purchase $200 in cards and get a $20 card to keep.
What it comes down to is each merchant must understand their customer and integrate the promotion of gift cards and support services where they matter most.
It would be interesting to know the sponsor of this survey…could it be a company who promotes personalized card services?
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Home Depot has a unique tape measure/level gift card which is an excellent tie in. I have also seen Disney license gift cards at Walmart and Toys “R” Us. These work well, especially when giving a gift to a child and you know what he or she is into.
The next wave of gift card personalization will be through packaging–packaging not only completes the presentation, but in a unique way that conveys the sentiment behind the offering. Integrated card packaging is definitely in demand. Our customers’ response to our new patent-pending package designs are evidence of that need.
The poorly documented survey results referenced in this article are more spin that not. In my non-scientific research (I talk to people) right now the area of gift card merchandising is in serious trouble on two major fronts. 1. Not many young people think gift cards are remotely cool–they LOVE to shop and to actually pick out and buy gifts for their friends–and 2. with many retailers and restaurants in financial trouble gift cards are more and more perceived by givers and receivers as an iffy investment. People question whether their gift card gifts will be honored.
The gift cards that will remain popular as presents this year are for gasoline, Walmart, Target and grocery stores from Kroger to Whole Foods. These do not require a personalization gimmick but that might make them more fun.
I love getting gift cards, but as a consumer, I’m not sure it really needs to be personalized. A gift card is a gift card, is a gift card.
The most important thing to remember when giving a gift card is to get the store I want it from right! A personalized gift card to Home Depot, with your mug on it, when I live in Manhattan doesn’t make a lot of sense. A card to the store I love shows you put some thought into it, and that’s the personal touch I want.
It is interesting that while their “impersonal nature” is one of the big inhibitors, it is also probably one of the biggest reasons people use gift cards. By that I mean, you don’t have to know what the recipient really wants in order to give them a gift card. As long as the card’s sponsor offers a decent variety of products, the recipient can use it to buy what they need.
I imagine this is the very reason many people prefer to give gift cards. The challenge is that where the line lies between too impersonal and not personal enough is a personal preference and is only important in the eyes of the recipient.
The economics of gift cards for retailers is great. When the redemption is less than the card value, the retailer makes out. When the redemption leads to additional sales, the retailer makes out. Rarely is there a redemption exactly matching the value.
Personalized gift cards have wide availability. I often see them and think who I know that they would match. For the future, the more personalization, the more likelihood that someone will buy them without the cop-out feeling.
In order to further spike the sales of gift cards, the retailers could offer discounts on the cards. Therefore the giver gets to give more value than they would otherwise in selecting a gift and the retailer wins on the breakage and additional sales.
Other opportunities may be gift cards for holidays that people don’t usually buy gifts. As a grandparent, I may be inclined to purchase a Halloween gift card for my grandchildren. Or, retailers could sell gift cards like greeting cards, “just thinking of you,” “hope you are feeling better,” or “congratulations on graduation.”
If you put thought and effort into a personalized card couldn’t that energy go towards picking out an actual gift?
Sounds like a fine idea. Any personalization for the gift card recipient makes the gift “just for them” adding a nice touch to a fairly cold gift gifting medium. The Target line of cards is fun and varied. It would be nice to see more retailers adding personalization and a bit of playfulness to a boring piece of plastic.
This seems to be a worthy idea–making gift cards more personal–though the thinking seems to be more about form (i.e., packaging and images) versus substance (multi-merchant, added value, real customer utility).
As long as gift card personalization is impersonal (though the Home Depot example above is clearly an exception) it will be a blip versus a spike in terms of effect.
I think customization of gift cards is a brilliant idea. Especially for younger recipients the thought of having a card personalized just for them is pretty exciting. I can imagine how excited the grand kids would be about having a card that is “theirs” and was made “just for them”! It would be a akin to having their own credit card.
It seems that it greatly helps transform a gift card from being thought of as “I couldn’t figure out what to give you and I didn’t want to spend the time trying” to “I care so much about you that I had a special, personalized card made just for you.” If done correctly, it should shout out “you’re so special that I went to great lengths to find the perfect gift just for you”!
And we already know what’s in it for the merchant issuing the cards, so it should be a win win.
The packaging of the gift card is where the opportunity is…for a child, a little stuffed dog holding it in its mouth. For adults, cards in a gift bag with a cute symbolic item….
What people dislike is the non-personalization of the gift. Christmas has become a just pass the cards around day. So tying the card to a package to be opened would be a winner.
The more retailers allow customization of gift cards, the more they will sell. It’s interesting to see the opinions that different age groups have towards gift cards. Younger consumers consider them to be a great gift, in that they allow the user to get exactly what he/she wants. Older consumers still consider them to be impersonal, in that they don’t require the thought or effort put forth to buy a “real” gift and they identify the exact value of the gift.
Gift cards are by definition impersonal. They are a solution to the problem of not knowing what to give someone. They are also a more efficient consumption process, making the recipient the decider. In many cases, card buyers do not know who will be the recipient.
So, personalizing cards will probably only work for a small segment of holdouts–those who believe that a picture of the recipient or themselves represents personalization. I suspect that most holdouts still want an old fashioned message that can accompany a gift, you know, like “I thought you might like this.” Definitely sounds like an opportunity for new research.
Gift cards are a great way for any retailer to enlarge their customer base. Gift card recipients often find that the cards have fees deducted and that many stores won’t issue cash refunds, either, even if the purchase is less than the amount left on the card. So gift cards are an opportunity to convince folks just how unpleasant a retailer can be. As far as personalization is concerned: sure, why not?
By the way, even if your store’s web site doesn’t sell merchandise, it’s easy to sell gift cards on any site, with almost no programming or operating cost. Yet almost every retailer who has a web site with no merchandise for sale refuses to use that site to sell gift cards.
Personalization alone isn’t going to drive enormous increases in gift card sales, but it is suitable as part of a suite of services or promotions.
Many stores with higher volumes currently produce numerous themed cards. This has likely helped repeat business with those who buy gift cards frequently for the same people. For other merchants, it’s simply not practical.
For retailers who do offer customized cards featuring personal photographs, the service often runs $5 a pop. In this economy, the typical consumer will probably skip it – especially if they need to purchase numerous cards. On the other hand, if the service can be underwritten by the merchant, there may be significantly more appeal. Free shipping is another valued service.
Gift cards are most popular for recipients who the giver doesn’t know well or a person living at a distance – especially children, whose size or current likes are difficult to track. It’s also good for the person who has everything. It even works in personal relationships where the gift of a valued experience can be given, like music downloads, a golf outing, travel, spa visit or dining occasion. Cash would never provide the same experience and emotion, nor would a gift that has to be returned. Stores can help with premium packaging – not just pretty wrapping but functional items (like a wallet, card case or stuffed animal) that become an incremental sale.
Many stores will incent with a value-added offer to encourage early holiday or volume purchases of gift cards, i.e., purchase $200 in cards and get a $20 card to keep.
What it comes down to is each merchant must understand their customer and integrate the promotion of gift cards and support services where they matter most.
It would be interesting to know the sponsor of this survey…could it be a company who promotes personalized card services?