Why is it important to think of your gift card as a branded currency?
More and more brands and retailers now have their own gift card programs. The latter is therefore one of the key tools of branded currency.
This notion brings an additional reflection by positioning the brand as a currency. To be clearer, let’s take the example of Nike. With its previous operation “Nike bid your sweat”, the brand transformed sweat during a workout into credit to buy products. This unusual means of payment is specific to Nike: it is a brand currency. The same goes for the single-brand gift card, which is also a brand-specific means of payment. This means that an Amazon gift card cannot be spent at Fnac and vice versa.
Today, in order for a brand to be successful and always stay ahead of other card programs, it is essential to think about its own branded currency. So, what about it?
The gift card evolution
A wider use
In the last few years, the gift card has greatly evolved, both in its features and in the uses made by brands.
Before, developing a gift card service was just a little extra for brands. The idea was to offer customers the possibility to buy them as a gift to give to their loved ones.
Today, we are moving towards a gift card both physical and digital, which opens up new functionalities and more flexibility. It is now used in marketing strategies to fulfil two main objectives: to acquire and retain customers. As gift card programs become more complex, brands are also opening up to the B2B opportunity and incentive to maximize benefits, control their brand image and generate sales.
But separated from other branded currency tools
Moreover, it is not only the gift card that has evolved. Other branded currencies such as coupons, loyalty points, loyalty cards… have also been dematerialised, allowing to make brand strategies more audacious, always in order to influence purchasing behaviour. Each of these tools is very successful among consumers. It is not surprising that loyalty points, the number one weapon in loyalty programs, are worth $165 billion worldwide.
But even though customers, especially the 25 to 34 years old ones, feel ready to use branded currency on a daily basis, the different tools available to retailers are still used separately. Surprising as they all work towards a similar goal.
Think branded currency for your gift card program
A global currency strategy
Rather than thinking of a gift card program on one side and a promotional strategy with coupons on the other, for example, brands can play the card of a global currency strategy (brand currency). It means thinking like a brand that “delivers” and uses its currency at the right time to influence consumers’ behaviours, increase both in stores and online sales and enable acquisition and retention. It is essential to combine each branded currency tool in the best possible way for a successful customer experience. Moreover, with the high adoption of smartphones in recent years, and digital in general, consumers (52%) now expect to have an only app to handle everything.
Predictions are:
In the coming years, retailers that will continue to use each branded currency tool separately will lose a significant competitive advantage over others.
Those that decide to initiate a branded currency strategy only after majority consumer adoption will fall behind. Considering the rapid pace of change, the delivered customer experience will be less differentiated, and they will only get a small window of opportunity.
However, some of them, called forerunners, will quickly implement a new approach: using different tools wisely on the same interface and in an interchangeable way for customers. All this with the only purpose of creating engagement with customers. Whether it is online or offline, and on any device, they will provide a branded and personalised customer experience for each user. These brands will then have a competitive advantage from the start, and will quickly widen the gap with competitors later on.
The gift card at the heart of branded currency
Where does the gift card fit into a unified branded currency strategy? Well, the gift card should be seen as a gateway for consumers and/or customers to enter a larger program.
A program in which brands offer consumers a single interface (multi-device compatible), where they can manage their promotional coupons, loyalty points, received and sent gift cards. They will also be able to redeem and convert loyalty points into gift cards more easily for example… But what about the gift card?
Imagine this. The gift card is ideal to make gifts during national or international events, but also to make small gifts for more private occasions (birth, birthday, moving…). Offered by email or via social networks, or even via SMS, for the digital part, the brand must give consumers the possibility to register it in their “personal space” on the website or mobile application of the brand. If they are new, they will be able to create their personal space in just a few clicks, and will then be invited to test a first brand currency (in this case, the gift card) to adopt others in the future. In the context of a promotional strategy, the mechanics will remain the same.
In the end, thinking about a branded currency strategy means thinking about how to make the use and the consumer’s interactions with the different brand currencies easier and more fluid, for an even more efficient customer experience.
Which points to achieve it?
Think omnichannel and synergy
The organisation of the teams is a prerequisite for the success of such a program. No longer should they work separately. The promotional coupons strategy team should not be separated from the gift card service or loyalty program teams. It is necessary to have a global vision and close collaborations between each team working on a branded currency tool.
As for the omnichannel challenges, it will be necessary to work on all levels: digital, mobile, physical… in order to deliver a consistent customer experience on each device.
Facilitate the use
Today’s consumers are looking for convenience. In today’s fast-paced life, they want to save time on everything they use, especially when it comes to shopping. The main difficulty for most customers is to manage the different brand currencies at their disposal. They don’t have a clear vision, they don’t know how to convert one into the other, if they can add them up during a purchase, how much time they have to spend them… Being part of a branded currency approach will allow to propose a global vision. The goal is that consumers spend their currencies as simply as with a more traditional means of payment, and that they are aware of what they can spend and when.
For example, Amazon offers its customers the possibility to pay for purchases on the website with their loyalty points which can be used as easily as a credit card.
Use of external experts
The technological requirements to implement such a strategy are quite substantial if you are starting from scratch. Setting up a gift card solution, by creating a loyalty program, is not an easy task. Fortunately, there are already off-the-shelf solutions for every brand currency which allow you to enter the branded currency market quickly. Regarding putting all these currencies in one place, this also requires specific skills. To begin with, retailers can consider working with mobile wallets like Apple or Google Wallet, then to converge to their own application that lists all the branded currency.
A successful example: Starbucks
Starbucks represents 7M users and 4,5M payments per week. In 2022, the number of transactions will reach 29,8M per month (against 27,5M for Apple Pay).
With those figures, the brand has perfectly succeeded the branded currency shift by developing a specific mobile app. Here, Starbucks has merged its means of payment with its loyalty program. Each customer that creates an account activates a loyalty card which is on a rechargeable prepaid card. Thanks to a barcode displayed on smartphone, consumers can simply and quickly pay at the register with it. But it doesn’t stop there, at each checkout, or for other specific actions, the user earns loyalty points that can easily be converted. The e-gift cards offered by friends and family are easily registered on the application from which the customer can manage it. The funds on the card are also transferable to the main card. For the social side: consumers can, via the application, make appointments, but also send gift cards that can also be registered.
The strength of Starbucks is to have succeeded in translating its branded currency system into a single application, while at the same time safeguarding and even improving the customer experience when the latter visits the store.
Having a simple gift card program is no longer enough today to stay competitive and deliver real value to consumers. Thinking in terms of branded currency, i.e. the gift card as part of a larger strategy, is the direction to take in the years to come. Enhancing brand image, acquiring and retaining customers, and significantly improving the customer experience are the focal points of such a shift. Customers will now be able to manage their branded currencies, just like at the bank.
