News

Focus on: Gift Cards

BY Phillip M. Perry

Retailers looking to add sparkle to this year’s Christmas season may want to take a new look at their gift card programs. Last year, more than half of consumers bought at least one gift card for the holidays, according to a report from First Data Corp., an Atlanta-based e-commerce processor.

Indeed, consumers seem to be taking more of a shine than ever to these types of spending vehicles.

“The average value of a closed loop card purchased in 2011 rose more than 23% year over year, from $34 in 2010 to $42 in 2011,” according to the First Data report. (A closed loop card can be used only at a specific store. An open look card, issued by credit card providers, such as Visa and American Express, can be used at any store).

The reason for consumer interest? Choice: Sixty-five percent of participants in a First Data survey said they valued the ability to select their own gifts.

“More than half of consumers would prefer to receive a $25 gift card than a gift valued at $45,” according to the report.

The message for retailers: Launching a new program or fine-tuning an existing one might pay off. Here are some tactics to consider:

• Go virtual. “Offer e-gift cards where possible,” suggested Shelley Hunter, a San Francisco-based gift card consultant. “The ability to send a gift from your phone gives the customer a way to quickly take care of last-minute gifts.”

Indeed, a report by digital gift card company Giftango Corp. noted that fulfillment of a gift card purchased from a retailer’s website generally takes three to five days from time of order to mailbox delivery, with the time frame even longer the week prior to Christmas. The report, “A Case for Digital Gift Cards: eGift Cards Turn Slowest Gift Card Sales Days into Busiest for Retailers,” found that gift card sales decline dramatically starting nearly two weeks before the gifting event.

However, this trend is reversed when instant digital delivery is presented as an option, according to the report. It found that the highest gift card sales days for retailers that offered both delivery options was Dec. 19, a full week later than the highest sales days for retailers that offered only plastic delivery.

• Incentivize the staff. “Reward store personnel who make gift card sales,” suggested Bob Phibbs, a retail consultant based in Coxsackie, N.Y. “Individuals on a commissioned sales team usually only get credit when gift cards are used, which can lessen efforts to sell them.”

• Liberalize return policies. If the recipient of a gift card buys something they end up not liking, will you refund their purchase or only issue a new gift card? You might prefer the latter option, but it can disappoint your customer. “You don’t want your employees angering customers about what the store can’t do with a gift card,” Phibbs noted.

• Encourage reloading. Only 9% of consumers reloaded a gift card they’d bought or received in the past year, according to First Data. Punch up that figure by offering cash bonuses or free items each time a customer adds cash to a card.

• Offer gift card substitution. Is a certain item out of stock? Post a “purchase gift card instead” sign at the in-store display, or on your website catalog. Train all the staff to offer gift cards when items are stocked out.

• Add value. Many people still hesitate to purchase gift cards, looking upon them as cold and impersonal. Warm things up by offering exciting combinations of cards and small merchandise items, Hunter suggested.

“Customers quickly catch the vision that adding a little something to the gift card turns otherwise impersonal plastic into a thoughtful act,” Hunter said. “Keep ribbon on hand to encourage the upsell.”

• Reward givers. Offer gift card buyers an incentive, suggested Hunter. “For example, customers who buy a $50 gift card might receive a $10 coupon toward their next purchase.”

Phillip M. Perry is a New York City-based business writer.

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P.Lopez says:
Apr-01-2013 08:01 pm

ChatRandom
Turn Slowest Gift Card Sales Days into Busiest for Retailers,” found that gift card sales decline dramatically starting nearly two weeks before the gifting event. ChatRandom

P.Lopez says:
Apr-01-2013 08:01 pm

Turn Slowest Gift Card Sales Days into Busiest for Retailers,” found that gift card sales decline dramatically starting nearly two weeks before the gifting event. ChatRandom

J.Hams says:
Mar-30-2013 06:48 am

suggested Hunter. “For
suggested Hunter. “For example, customers who buy a $50 gift card might receive a $10 coupon toward their next purchase.” Barry

J.Hams says:
Mar-30-2013 06:48 am

suggested Hunter. “For example, customers who buy a $50 gift card might receive a $10 coupon toward their next purchase.” Barry

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Navigating a Social Media World

BY CSA STAFF

With more and more consumers accessing social network sites to gather input and post reviews, Chain Store Age spoke with Dick Reed, CEO of Just Media, on a subject that is a top priority for retailers across the board: how to reach out to consumers in today’s social media world.

Your company has done some detailed research on how consumers make buying decisions in today’s social media world. Tell us about it.

We ran an online survey to discover what information sources were being referred to when regular consumers considered the purchase of a technology product. Our objective was to discover what sources they use and which are the most important and influential.

We did this to help a client understand the purchase process because, while we had run a successful advertising campaign (in terms of response and interest) promoting one of their products, there had been a lack of conversion to actual sales. Our belief was that other factors were impacting this conversion, most notably some poor user review scores that appeared on various e-store websites.

We believe that the response data we collected is quite representative of purchase processes for many general product categories given the overwhelming access the general population has to information through smartphones, computer and tablets.

How important are online reviews?

They are critical. Cumulatively, 73% of respondents claimed online user reviews were “critical, I always check this” (23%), or “an important part of decision” (50%). Professional reviews came in second, at 70% overall. Compare this, however, with feedback from in-store sales person at only 19%, or manufacturers’ own reviews at 22%.

Should retailers ignore negative comments?

Generally speaking, retailers are ill-advised to ignore complaints since the impact of the negative comments is obviously quite severe. Put emotion and hurt to one side, take a deep breath and respond professionally. Remember, even when he or she is not, the customer is always right!

More importantly, user feedback offers the retailers or manufacturers an opportunity to see where they may be falling short in terms of service, and to address the issue before it impacts on their business long term.

Many retailers seem uncertain when it comes to the thrust of their social media strategy. What should their focus be?

One of the most interesting responses we saw in the survey — and certainly the one that surprised us the most — was that users are not giving much credit to opinions posted in social networks like Facebook and Twitter. They much prefer user reviews posted on sites where they actually buy, such as Amazon.

We suspect this is because random comments in social networks are less in context with regard to others, so it’s hard to get a good overall picture. Users know that a few negative comments are always likely, and it’s a question of how the negatives compare with the positives.

Given this, we advise clients to focus on helping purchasers who like their products become advocates for them by posting where it matters, at the point of purchase, or where many user reviews are gathered like on a product review site. Facebook pages might be nice to get fans and share and build communities, but it’s not necessarily going to help those new prospects become a buyer.

Is online advertising on social media sites an effective strategy for retailers?

Yes, we have found social sites to be good areas for online campaigns, which perform as well if not better than many other types of online sites.

Summing up, how should retailers reach out to consumers in today’s social world?

Never underestimate the power of user reviews, and encourage your social community to actively help by becoming advocates. Do not ignore negative comments, and if you have a product that users really don’t like, refrain from using marketing to try and drive the sales … all you do is actually damage the brand by directing people to all the negativity. Indeed, it actually makes sense now to advertise the products people love the most to help boost the brand and encourage even more positivity.

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Dec-19-2012 05:57 am

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Dec-19-2012 05:57 am

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Spreading Holiday Cheer

BY Staff Writer

A lot has changed in the past year on the social media block. Facebook and Twitter are no longer the only two major players helping retailers connect and engage with their shoppers in real time. Consumers are flocking to platforms such as social-photo sharing sites Pinterest and Instagram, and some brands are even creating their own social blog accounts on Tumblr.

As retailers start to get ready for the busiest shopping time of the year, experts say they must consider how to best reach their target audience via the social platforms on which they already engaged.

“Unlike print, radio and television, social media gives some control to shoppers, allowing them to share with friends, comment or even curate,” said David Dorf, senior director of technology strategy at Redwood City, Calif.-based Oracle. “Done right, a smaller budget can actually reach more people and ‘go viral,’ allowing shoppers to participate and shape the message. These efforts can sometimes be stickier than traditional advertising and can engage these shoppers in ways that retain them in the long run.”

Here are some suggestions for how to make the most of the key social media platforms this holiday season — and all through the year:

Twitter: In addition to pumping out last-minute deals to followers, Twitter is unprecedented when it comes to optimizing direct-to-consumer marketing and customer service. Retailers can take advantage by combing through tweets and searching for keywords.

“If people are tweeting about having a sore throat, we’ve seen drug stores tweet back with a deal for cough drops,” said Molly Garris, digital strategy director for global ad agency Leo Burnett. “If a shopper says they are looking for a last-minute gift for a child, tweet them a suggestion and a discount code. Social listening is powerful, especially when it’s done at the right time and with the right message.”

Solutions are also available from companies such as New York City-based LocalResponse, which “listens” > for keywords and locations, and tweets targeted messages.

Meanwhile, Oracle’s Dorf recommends having someone on Live Chat and social media 24/7 to field customer-service inquiries.

Instagram: Although Instagram has been around since 2010, its growth skyrocketed in the past year, boasting 50 million members in the spring — around the time Facebook acquired it for a rumored $1 billion.

“Brands can get consumer consideration at a new speed,” Garris said. “Coupled with beautiful photography, companies such as Banana Republic are presenting looks in ways that resembles a high-end brand. Merchants are also sharing pictures that hint at future trends, which make shoppers feel like they have insider access.”

Pinterest: Pinterest — which also launched in 2010 — has become one of the most buzzed-about social networks, and retailers such as Macy’s and Nordstrom are already working hard to tackle the medium.

“Pinterest allows users to upload and share products — and a retailer can benefit from click-throughs to its website — but it’s also great for providing do-it-yourself project ideas and gifts,” Garris said. “Retailers can get creative and show how to make something special with their products.”

Facebook: In addition to posting pictures on Facebook that give context to products — such as a sweater for the dorm or a blanket for watching TV — integrating a Facebook Like button on product pages allows shoppers to share items with others. The images then show up in their friends’ news feeds, which furthers the brand’s reach.

“Brands aren’t necessarily seeing a lot of purchases from Facebook, but the ads are useful and so is encouraging people to share their purchases on the site,” said Sucharita Mulpuru, VP e-business and channel strategy at Forrester Research.

Tumblr: Brands such as Kate Spade, Anthropologie and Saks Fifth Avenue are turning to Tumblr — which rakes in 250 million page views each day — to create destination pages for fans, where they can check out pictures, videos, editorial and other multimedia content that bring products to life. Think of it as a modern-day, interactive catalog on the Web.

Overall, social media sites hold the key to engaging shoppers this holiday shopping season in ways that could last throughout the year.

“Broadcasting deals might drive sales in the short term, but smart retailers will find ways to establish a deeper, long-lasting relationship,” Dorf said.

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