The State of Gift Cards in Australia
Omnichannel retailers often have a physical gift card for in-store AND a digital eGift card for online. It doesn't have to be that way. Modern, omnichannel gift cards promote customer retention & loyalty, as well as new acquisition and sales opportunities in gift card marketplaces.
I've been a strong proponent of gift cards for multiple national retailers across both online and in-store. The fact that I have to segment sales channels has long been a blocker to a successful rollout and fully leveraging a gift cards program across the brand. This is no longer the case with digital now driving gift carding and payment rails employed to allow low or no integration solutions.
Now's the time to make gift cards part of your sales strategy.
Some Facts About Gift Cards in Australia
• Gift cards as an industry is expected to grow +11.3% in 2022
• Australian gift card sales in 2022 are expected to hit $8.9bn AUD
• Prepaid card industry expected to reach $40bn AUD by 2025
• 61% of consumers spend more than the value of the gift card
More than half of consumers spend more than the value of a gift card when they use it.
• Australia-based Prezzee has issued more than 20 million gift cards
• Prezzee processed c. $1bn AUD in corporate and retail cards in FY22
• In OCT 21, Commonwealth Bank invested in a 20% shareholding in Karta, an Australian born technology focused gift card platform
• Australians hold an estimated $1.8bn in unused gift cards
• Gift cards in Australia are now valid for 3 years from date of purchase
As an Acquisition Channel
Gift cards aren't just a payment method or gifting opportunity for your brand. You can utilise the Afterpay and Zip Pay gift card marketplace channels by signing up with digital card provider, Prezzee directly. This will enable your cards to be sold across multiple sales channels at a lower acquisition cost circa 8% (commission on eGift card example).
Gift cards expose your business to people who may not have shopped with you. Known customers that love your brand purchase gift cards for friends, helping to grow your customer base for you.
• 52% of people bought a gift card to give someone else in the past 12 months.
Some Gift Card Marketplaces
PayPal | Afterpay | Zip | Coles & Myer | The Card Network | Woolworths | Australia Post | Prezzee ... and many more.
Many omnichannel retailers have both a physical gift card in-store and a digital eGift card online. This is currently the most common. But it doesn't have to be so complicated ... converging the two is a massive CX improvement and what customers want. Customers shop a brand not a channel and having a gift card that is only good in-store or online just doesn't cut it in 2022.
If you are a pure play online only brand, sign up with Prezzee and provide them your own generated gift card codes from your website or ERP. Modern day POS systems like Shopify POS, Square, Lightspeed, and many others have gift card functionality and many allow you to order hard gift cards in their hardware stores.
Another emerging solution is Karta which claims to allow you to manage your entire gift card program as a platform. Their QR code prototype is simple enough and can be up and running in no time - and without an integration!
So who's doing it right?
Sephora has a gift card that is good across channels and the redeemer can accrue points from their gift card purchased items as well. I love the fact that they offer multiple themed cards as the card is about giving and branding should come secondary. One miss is the lack of a "For Him" and Father's Day card, but they've done well nonetheless.
Some Ideas for Your Gift Card Strategy
• Customer loyalty - Gift card promotions to your most loyal
• Manage returns & Exchanges - Offer customers a gift card instead
• Rewards - Treat your team or VIPs to gift cards as a thank you
• Marketing Partnerships - Gift card swap w/ another cross-vertical retailer
• Channel Expansion - Motivate in-store customers to shop online or vice versa
• App Value Add - Make your retail app worthwhile with loyalty and gift carding
• Spend & Save - Give a gift card for the next shop as a promotion today
• Gifting Made Easy - Make it easy to one-click gift and watch gifting grow
About Mike Fowler
Mike is an eCommerce veteran, senior leader & growth strategist for some of Australia's best retailers. Formerly at Afterpay as Director of Merchant Services APAC, General Manager and founder of the growth team at Mosaic Brands (Noni B Group) developing and launching 9 iconic multi-category online marketplaces, including: Noni B, Rockmans, Millers, and Rivers, as well as Head of Digital at Blue Illusion. Member of the Australia Post Customer Advisory Group with more than 15 years experience in helping retailers leverage eCommerce, CX, payments, & logistics opportunities to maximise growth.
