1 8 Ways to Work eGifting Marketing Magic This Holiday Season and Beyond
Dec 23, 2015
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Today’s Speakers
• Lauren Freedman– Founder, CEO, the e-tailing group
• Kathleen Goodwin– VP of Marketing, CashStar
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The Digital Gifting and Incentives Company
Industry’s first digital gifting and incentives platformPowering 75+ leading retailersB2C and B2B strategies Boost online and in-store salesAcquire, retain and re-engage customersBuild loyalty and brand preference
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15 years e-commerce consulting
Fortune 500 client projects
Extensive cross-category expertise
Proprietary research studies
Author, “It’s Just Shopping”
50+ years experience
The Voice of Cross-Channel Merchandising
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Straight talk from “in-the-trenches” online merchandising experts
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Today’s Agenda
I. Holiday Forecast
II. Gifting is a Retail Staple
III. Digital Gifting is a Workhorse
IV. 8 Tactics to Work Gift Card Magic
V. Visibility & Seasonality
VI. Marketing Optimization
VII.The e-tailing group Digital Gifting Readiness Checklist
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Holiday Forecast: Cautious Optimism
• Q1/Q2 ecommerce sales grew by 6% and 9%1
• Forecasts suggest annual growth of 10% a year through 20132
• US retail sales are only poised to see 3-4% gains3
• Consumers will still be frugal this holiday season
• 29 days to market post-Thanksgiving
• Competition will remain fierce among multi-channel merchants
• Cross-channel investments will continue to pay off
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1comScore 2eMarketer 3NRF
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II. Gifting is a Retail Staple
Gifting has already become a $300B business, representing 10% of the $3T retail economy
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1Unity Marketing
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Importance of Gifting
Q10
2% or less
3-5%
6-14%
15-30%
31-59%
60-100%
Don't know
15%
11%
27%
16%
3%
8%
20%
18%
9%
18%
22%
7%
9%
17%
21%
9%
19%
19%
8%
5%
19%
What percent of your business is giftingversus personal consumption?
2008 2009 2010E-tailing group 2010
Annual Merchant Survey
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the e-tailing group Merchants: the EG100, 4Q09
1-800-flowers Diapers.com King Arthur Flour SephoraAeropostale Dick’s Sporting Goods Kohl’s Shop NBCAmazon .com Discovery Channel L.L. Bean Shop PBSAmerican Girl Drs Foster & Smith Lamps Plus Skecher’sApple Drugstore.com Lancôme USA SolutionsArmani Exchange eBags.com Lands’ End Sony StyleAveda EBGames Lego StaplesBare Necessities eToys Lowes SundanceBarnes & Noble Famous Footwear Macy’s TargetBass Pro Forever 21 MoMA The AvenueBath & Body Works Frontgate New Egg The Children’s PlaceBed Bath & Beyond Gaiam Nordstrom The Container StoreBEST BUY Gap Office Depot The Home DepotBlue Nile Gardener’s Supply Orvis Things RememberedBluefly Garnet Hill Overstock Toys ‘R UsBorders Giggle PetSmart Under ArmourBrooks Brothers Godiva Polo Urban OutfittersBrookstone Golfsmith Pottery Barn Victoria’s SecretBuy.com Green Mountain QVC Vitamin ShoppeCabela’s Harry & David Radio Shack Walgreen’sClinique HP Home & Home Office RedEnvelope Wal-MartCoach HSN REI Williams-SonomaCooking.com iRobot Road Runner Sports Wine.comCrate & Barrel J.Crew Saks Fifth Avenue ZalesCrutchfield JCPenney Sears Zappos
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Gifting Essentials Are in Place
• One-stop shopping for gift giving
• Price-point links
• Recipient segmentation
• Gift card touted as “the gift that always fits”
• Holiday delivery timing
Feature % Penetration EG100 4Q09 EG100 4Q08 EG100 4Q07
Gift Certificate/Card 90% 92% 95% Gift Center 87% 91% 91% Gift Message Available 74% 78% 69% Holiday Shipping Deadline 74% 89% 90%
Source: 4Q09 EG Mystery Shopping
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Gifting/Gift Card Evolution Points to Opportunity
Traditional Gifting /Gift Certificates
Pre-1990 Plastic Gift Cards Late 90s/early 2000s
Digital Gifting Emerging
2008/2009Digital Gift Card as core part of marketing mix
2010 +
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The Gift Card Should Keep On Giving
Consumers prefer choice relative to type and redemption optionMerchants can accommodate both format and channel flexibility
with cross-channel redemption
Feature % Penetration EG100 4Q09 EG100 4Q08 EG100 4Q07
Gift Certificate/Card 90% 92% 95% Mailed Certificates 90%* 90%* 91%* Electronic Certificates 60%* 53%* 56%* Redeemable online 98%* 96%* 94%* Redeemable in store 91%* 85%* 91%* Ability to Personalize/Customize 19%* N/A N/A *Subset of 100 merchants N/A = not tracked in that survey edition
4Q09 EG Mystery Shopping
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Personalized and Customized Gift Cards Evolve
• An array of engaging house designs available
--OR—
• Personalize your own card
• Photo• Image• Video • Message
1 in 5 merchants offered custom capability in 2009
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Consumer Spending On Gift Cards Sees Strong Growth
• Over half of consumers purchased a Gift Card1
• More than half of consumers said that gift cards made up more than 25% of their total online spending for Holiday ’091
• One-third of consumers spent between $50 and $200 total on gift cards purchased online1
• Almost two-thirds of gift cards purchased online averaged between $10 and $50 each1
U.S. online gift card sales are projected to hit $5.6 billion in 20142
12010 Shop.org Holiday Strategy and Planning Guide 2Javelin Strategy, 2010
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Digital Gifting Consumer is Powerful
• 45–54 years old• Predominantly female• Affluent, earn an average more than $75K/year• Well educated, college and college+• 70% spend 20+ hours a week on the web• Buys an average of 7 gift cards per year
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Consumers Give Digital Gifting a Vote of Confidence
• 93% of digital gift card purchasers would recommend the service to a friend
• Top reasons for purchasing include: – Personalize the gift – Ability to choose the amount – Avoid shipping and other
related charges – Speed of delivery– Ease of use – Security – Notification when sent and
opened
Rising Preference For The Convenience of Digital Gift
*2009 Pre-Holiday eGifting Survey
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Why Growth? Why Now?The “Digital Age” Has Arrived.
It is a primary communication and commerce channel
309mm online purchases 78mm iPhones
35% of all online adults visit a social networking site daily
$131mm in eBook sales
$200mm iPhone applications sold every month
The average dwell time on Facebook is 6 hrs per day
3mm+ iPads
Source: CNET, Nielsen Research and Apple
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Alternative Payments Already in Play
4Q09 4Q08Deferred Payment Plans/ BML 47% 40%eBill Me 3% 2%Paypal 34% 23%Google Checkout 13% 13%Amazon Checkout 1%* 1%
4Q09 EG Mystery Shopping
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Merchants Make Impressions Responding to Consumer Interest In Social Media
E-tailing group 2010 Annual Merchant Survey
Community or Social Media Tool
Employ todayPlan to employ in the next 12
months
Considering for future, beyond
1 year
No plans to employ
Facebook fan page 78% 13% 4% 5%Customer reviews 65% 20% 7% 8%Twitter publishing 64% 16% 9% 11%Blogs 45% 27% 10% 18%Facebook connect 41% 30% 9% 20%Social listening tools 33% 27% 16% 24%Viral videos 30% 19% 22% 29%Questions and answers 29% 22% 21% 28%Community forums 22% 14% 29% 35%Product suggestion box 16% 24% 20% 40%
Which community and social media tools does your company employ today or plan to employ in the next 12 month?
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23% of US mobile-phone users have smart phones
Mobile Embraces “Anywhere, Anytime” Buying
eMarketer
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III. eGifting is a Core Strategy Digital gift cards were seen as the ONE thing
merchants will invest in for Holiday 2010
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2010 Shop.org Holiday Strategy and Planning Guide
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Merchant Alert: Digital Gifting’s Time Is Now
• Digital gift cards fuel opportunities for merchants to build year-round and seasonal programs
• They cost-effectively motivate and drive desired customer behavior
• Retailers take advantage of the requisite retail marketing trifecta: acquisition, retention, and re-engagement
• Digital gift cards serve as a multi-channel tool
• Realized digital gift card loss ratios among retailers can be as high as 45%
Merchants must increasingly make use of digital currencies and gift cards. Today’s eGift cards fuel opportunities for merchants to build year-round and seasonal programs, supporting the evolution of both B2C and B2B marketing strategies. They cost-effectively motivate and drive desired customer behavior based on each merchant’s unique marketing methodologies. This enables retailers to take advantage of the requisite retail marketing tri-fecta: acquisition, retention, and re-engagement. With proper planning and superior marketing execution these workhorses are poised to be part of any retailer’s integrated marketing mix.
Retailers are embracing digital solutions that protect margins and safeguard customers
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Q3
Customer acquisition 95% 93%Customer experience 94% 91%Customer retention 94% 96%Profitability 92% 95%Drive qualified traffic to site 90% 86%Customer service 88% 91%Onsite merchandising 77% 77%Branding 73% 73%Improve KPIs (key performance indicators) 71% 83%Resources (time, people and funding to get things done) 66% 65%Process improvement 64% 64%Technology and systems initiatives 61% 61%Multi-channel integration 49% 49%Social marketing strategies 48% naGlobal web initiatives 24% 24%Mobile initiatives 23% na
Rank the importance of each of these initiatives to your strategic goals ("Top-2 Somewhat to Very Important" )
2010 2009
E-tailing group 2010 Annual Merchant Survey
Retailer Strategic Goals
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Powerful Digital Gifting Performance Results
• Every transaction delivers 2 customers
• Average face value of digital gift cards higher than traditional
• 93% of all purchases included a personal message
• One in seven buyers uploaded a personal photo
• 20% of buyers chose a future delivery date
*2009 Pre-Holiday eGifting Survey
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Tactic #1: Incenting Customers With Gift Cards
Goal: Retention, Branding, Cross-Channel Traffic Driver
Ideal Business Segments: B2C
Optimal Timing: Year-Round
Why It Works:Increases revenues to the bottom-line; Rewards best customers; Drives future spending
• Optimize existing customers
• Encouraging higher order values has performed
• Reward big spenders to drive repeat business
• Foster customer relationship building
• Deliver efficient re-engagement
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Tactic #2: Customer Issue Resolution Tool
GoalRetention, Customer Service, Branding, Cross-Channel Traffic Driver
Ideal Business Segments: B2COptimal Timing Year-Round
Why It WorksFeel-good strategy for customer and easy-to-implement solution
• Resolve customer service issues – perfect solution for any customer service challenge
• Fulfill warranty obligations
• Returns and refunds
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• 56% of EG100 merchants have a rewards program
• Stimulates buying
• Increase visits to web and brick-and-mortar locations
Goal:Retention, Re-Engagement, Branding, Cross-Channel Traffic Driver
Ideal Business Segments: B2COptimal Timing: Year-RoundWhy It Works: Increases overall sales volume
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Tactic #4: Re-engage Lapsed Customers
GoalRe-Engagement, Retention, Branding, Cross-Channel Traffic Driver
Ideal Business Segments
B2C
Optimal Timing Year-Round
Why It Works
Individual has been a customer so likely has a pre-disposition to shop your brand where promotional prodding can perform; Once they are re-engaged retention is the goal
• Bring customers back through “We Miss You” promotions
• Re-engage one’s customers for retention efforts
• Increase life-time value of a customer
• Incent repeat visits to in-store
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Tactic #5: Behavior Motivation
• Instant reward for shoppers
• Surveys ideal deployment
• Testing online or in-store tools an option
• Talbot’s sold 590,000 pairs in nine weeks
Goal;Achieve Desired Behavior, Retention, Re-Engagement, Branding, Cross-Channel Traffic Driver
Ideal Business Segments: B2COptimal Timing: Year-Round
Why It Works:Customers enjoy being rewarded; Information secured and exposure is well worth the payout
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Tactic #6: B2B Corporate Gifting
• 46% of the EG100 have a Corporate Gifting initiative
• Recipient preference for digital gift alternative
• Efficient purchasing experience
Goal: Branding, Acquisition Ideal Business Segments: B2BOptimal Timing: Seasonal; Some Year-Round Needs
Why It Works:Simple; Excellent choice for all customers; Efficient to execute
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Tactic # 7: Rewards and Employee Incentives
• Incentive market $30-70B1
– $4.9B in gift cards1
• 25% projected annual growth1
• eGift Cards are a simple solution
• Employee behavior driver
Goal: Behavior DriverIdeal Business Segments: B2B Optimal Timing: Year-Round
Why It Works:Efficient deployment; organizations; drives specific employee behavior
1Prepaid Press
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eGifting Is Multi-DimensionalFrom gift centers to navigational visibility, all locations should be in play
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Structure Your Holiday Promotional Calendar Around Key Dates
• Have a calendar of promotions ready
• Reinforce year-round opportunities
• Message multiple times
• Remind shoppers of the power of digital gifting
• Digital gift card shopping days differ
Date Day Nov 30 Cyber Monday Dec 14 Monday Nov 27 Black Friday Dec 5 Tuesday Dec 7 Monday Dec 16 Wednesday Big Research/Shop.org
Q4/09 Top Revenue Days
Date Day
Nov 27 Black Friday
Nov 30 Cyber Monday
Dec 18 Friday (Shipping deadline)
Dec 18 Saturday (Shipping deadline)
Dec 20 Monday (Shipping deadline
Dec 22 Tuesday
Dec 23 Wednesday
Dec 24 Thursday
Dec 25 Friday
Q4/09 Top $ Digital Gifting Days
*2009 CashStar Retail Study
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Email Captures Last-Minute Purchasing Opportunities
Almost 50% of those who bought gift cards in the last year say they tend to shop for gifts at the last minute
Source: Javelin US Gift Card Study
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The Power of Last Minute Digital Gifting
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“We were thrilled to see a tremendous spike in gift card sales during the week leading up to Christmas because customers could have the eGift Cards e-mailed immediately.
That week (the week leading up to the Christmas holiday ) historically, has been a valley for online sales of traditional gift cards due to shipping deadlines. It was definitely a great solution for the last minute holiday shoppers.”
Margery Hurlbut,
Customer Solutions Director
The Container Store.
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Tactic # 8: Give One, Get One
• Multi-channel promotion– In-store and on the website
• Consistent messaging
• Email campaign
• Blogger outreach
• 13K new email addresses
• 11.2M social media impressions over two days
• Average face value more than double that of traditional plastic cards
Goal:Acquisition, Retention, Re-Engagement, Branding, Cross-Channel Traffic Driver
Ideal Business Segments: B2COptimal Timing: Year-RoundWhy It Works: Average face value can increase 11% to 23%
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VII. the e-tailing group eGifting Readiness Checklist
1. Review your current plan
2. Brainstorm gifting strategies
3. Integrate digital gift cards in your strategic holiday mix
4. Develop compelling creative tactics
5. Build out calendar with key selling dates
6. Explore a variety of strategies
7. Partner wisely
8. Deliver best-in-class customer service year-round
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To learn more about CashStar and to get a FREE digital gifting analysis, contact [email protected] or
To learn more about the e-tailing group, go to www.e-tailing.com Or contact Lauren Freedman at [email protected]