eCommerce

Converting Gift Card Shoppers into Return Customers

December 7, 2022
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Michaela Barriga

Gift cards provide more opportunity than just revenue upfront. Here's how eCommerce brands can take advantage.

Black Friday and Cyber Monday are behind us and the holiday shopping season is in full swing! We decided to research some stats on post-holiday gift cards and here’s what we found out:

  • Gift card purchases are on the rise: last year a study of holiday spending habits from ten countries reported that gift cards made up nearly 45% of holiday spending
  • This BFCM, gift cards made up 27% of top gifts purchased
  • 82% of consumers plan to use their holiday gift cards in the first half of the year
  • Of the consumers who planned to spend more than the value of their gift card, 41% said they anticipate spending at least $50 or more

What does this mean for your business? Gift cards provide more opportunity than just revenue upfront. We’re excited to share the opportunities we found when researching post-holiday gift cards, their impact on businesses, and how you can take advantage of all the opportunities to connect with new customers.

Read through or jump to a section here:

Opportunities for Post-Holiday Shopping

November and December are busy shopping months, but post-Christmas can be busy too! Many shoppers will come to redeem their gift cards in the following weeks and months after the holidays. And they’ll often spend some of their own money in the process! Here are a few opportunities we see when it comes to capitalizing on post-holiday gift card spending:

Opportunity #1: Make a New Friend. Some gift cards provide the opportunity to connect with new customers. Consider how often this happens when gifting: someone may know their loved one would enjoy your shop, but want to give them the opportunity to pick out what they want, or contribute towards part of their purchase with you. They buy a gift card! When this gift card receiver comes to your site, how will they be received? Implement a post-holiday website journey for new visitors like this. How will you connect with them?

Advice for making a new friend:

  • Create a concierge-like website experience that goes above and beyond to help someone make their first purchase – perfect the first time!
  • For those that provide contact information for the first time, offer a first-buyer discount (bonus points: consider Fondue’s CashBack option, which is more profitable than order discounts).

Opportunity #2: Build Your Lists. Hit the ground running this new year by using increased traffic from gift card shopping to build your email and SMS lists! There are many ways you can do this. We help people build their lists through custom banners that follow shoppers through the site, website pop-ups that learn what the shopper wants and personalize their display to match, quizzes to help shoppers identify what they really need, and more. How will you build your list in the new year?

Advice for building your lists:

  • Establish an attractive and engaging way to ask shoppers for their contact information
  • Identify more than one way you can collect contact information – don’t rely on just one method! (i.e. both a pre- and post-purchase opportunity, as well as experimenting with pop-ups vs. banners)

Opportunity #3: Comeback Incentives. The opportunity with every new shopper is to get them to return. Returning customers Repeat customers have been measured to spend an average of 67% more than new customers. In other words, if you can prove to a new customer that you are trustworthy and your products valuable, they will likely buy even more the next time. So! How will you incentivize first-time customers to return?

Advice for comeback incentives:

  • Follow up post-purchase and ask for feedback on their purchase. Consider giving reward points for sharing their review to incentivize point collection and future purchases.
  • Strategize your incentives based on how often your customers purchase again with you. If they bought a supplement, reach out when it’s time for a refill. If they bought a winter shoe, reach out with the upcoming spring styles at the change of the season. Get creative!

Advice from Ragnarok: Making Gift Redemption Exciting

One awesome way to make the most of the gift card spending season is to make the gift card redemption exciting! Our partner Ragnarok is a full-service CRM agency who connects creative, marketing, and technology in every area of their projects.

ragnarok

We asked them how they’d help a customer who wanted to capitalize on the gift card redemption opportunities. Here’s what they had to say!

Gift card customers are fantastic in that someone else did the work of acquiring them for you (hooray for free customers!). But they are notoriously hard to convert into paying loyalists. 

Here’s how we improved the gift card customer retention rate for a well-known beauty subscription service from a dismal 3% to double digits (15%+!)...

  1. Put a bow on it: Whether presented digitally or physically, the way the gift card is presented to the recipient matters! Be sure to sneak some brand education into your gift card emails or unboxing to help prime the recipient for a great shopping experience. 
  1. Make redemption easy-peasy: Don’t force people to jump through hoops to use their gift card. For this particular beauty brand, we built a guided flow for gift card recipients to help them claim their gift step-by-step while offering some brand education and product recommendations along the way. 
  1. A warm welcome: Once a new customer checks out with a gift card, you can segment them into a tailored welcome sequence to ensure they are nurtured in the same way you might think about nurturing a lead. Design a sequence of onboarding messages to really sell them on the brand value proposition. At this point, you may even want to notify the recipient that they’ve claimed their gift to help start a conversation between the gifter and the giftee! We love this simple, yet extremely effective example of a gift claim notification from Daily Harvest:
gift card refer a friend
  1. Targeted CRM efforts:  A gift card recipient’s first shipment is prime real estate for additional welcome materials and even retention offers. For this beauty brand’s giftee retention program, we offered a $20 promo code for savings off their next purchase in their first shipment and designed the offer collateral to look and feel like a gift card. After that, we continued to drip targeted retention efforts via digital channels (email, push, SMS, ads) with a mindset of aiming to “reacquire them”.

-Loretta Doria, Senior Strategist

Advice from Iterable: Engaging with New Customers Across Any Communication Channel

Our partner Iterable enriches relationships between consumers and brands and empowers marketers to bring their visions to life through adaptive dynamic lifecycle journeys across any channels. They use real-time behavioral data to connect to the audience you care about and personalize their entire shopping experience with you.

unlock your data to develop deeper customer relationships with iterable

We asked Iterable what advice they’d give a customer wanting to crush this gift card spending season. Here’s what they had to say about customizing customer experiences across communication channels!

"When customers come to your site to redeem a gift card, consider the channel they’re using. For example, if they are going to your mobile site—over 60% of web visitors are on a mobile device—in-browser messaging can provide an opportunity to opt-in to other mobile channels. Maybe you offer a coupon if they sign up to receive SMS messages or download your app. Meet customers where they are to open up more communication channels and keep them engaged. " -Iterable

Build Your Funnel for the Year with Holiday Gift Card Redemptions

We enjoyed exploring the reality of gift card purchases during the holidays and finding all the valuable opportunities to crush the gift card redemption season. Wherever there’s gift exchanging, you can expect to find some gift cards in the mix of wrappings. It’s important to strategize for it and make the most of every moment. You never know what loyal customers you could be missing out on if you don’t!

What other opportunities are out there for this season? How are you strategizing?

We love talking about the amazing sales opportunities every season brings! Contact us if you’d like to explore your next data-collecting strategy. Until next time!

Michaela Barriga
Content & Partner Marketing Manager
Michaela is Digioh’s Content & Partner Marketing Manager and oversees all things content and partner connection. With a passion for helping businesses grow stronger through organization and authentic connection, Michaela has worked with small and large businesses in copywriting, content creation, and project organization. She currently resides in Austin, Texas with her husband and their 2 black lab mixes.

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