Apparently, retailer are hoping that Americans will spend 60 billion dollars on post holiday season sales. One estimate is that nearly 24 billion of that will come from cashing in gift cards. The only question I have is; “When are they going to spend it?” Many are focusing on cutting prices and capitalizing on the post Christmas sales, but in my opinion, spending “stored dollars” becomes increasingly important to customer’s retention and customer loyalty, not just a way to clear out the storage closet.
Reminding customers that they likely got a gift card, during the holiday season, and that it is a welcomed form of payment for their next purchase, may be a way to strengthen the conversation between retailers and consumers, particularly online. Consumers may appreciate the fact that their favorite retailer, or potentially new favorite retailer, reminded them of their stored value cards, and can recommend products or service that fit their lifestyle and preferences. Integrating this information with your CRM can be a great way for marketers to target promotional communications and generate more revenue opportunities. Imagine receiving a target email communication that says; “We know you probably have a gift card, why not come spend it on some of those technology things you like and more.” You may just be willing to click on a few call-to-action buttons in the email and purchase some things. Sure consumers are spending dollars that someone else has already spent, but what about that additional $50 power cable, or the $100 spa membership that their friend or loved-one would not have bought. The upsell and crossell opportunities, could be huge. Now that consumers have nearly 60 billion dollars stored away, your sales team can focus on selling additional services or products to compliment a customer’s primary purchase. As a customer, I would much rather spend 50 bucks on the accessories for my iPod, than the 300 bucks for the iPod and accessories (Assuming a $250 price tag on the iPod, and the gift card is valued at $250). On top of that, let’s face it, as a retailer you are taking a better margin to the bank on the accessories and service offering than you are on most of the primary purchase products, anyway.
Many retailers may think that this is a bad idea, but I see this as an awesome opportunity to capture a new customer, or even learn more about an old one. Increasing a customer’s spending, even if it’s stored value, increases the likelihood of that customer returning for future experiences, and buying similar products or service to compliment their previous purchase. It may even rekindle an old retail-customer relationship, that has been dormant for a while. Maybe I’m thinking too much like a consumer, but if the possession of a gift card gets a customer in the door or on my website, as I retailer, I’m happy you have it. Gift cards simply act as Mr. Opportunity knocking, it’s just up to retail to answer.