Digital Gifting Evolves
By Deanna Ting
March 17, 2014
While there’s a lot of buzz surround eGifting, the majority of gift cards given in the B2B space are traditional plastic ones. “Only about 2 percent of incentives are being delivered as virtual gift cards, even though 44 percent say that gift cards act as the best incentive tool in their portfolios,” says Michael Hursta, vice president of Atlanta-based First Data Prepaid Solutions. “Even though there’s a certain demand to use e-gifts as an incentive tool, there are still some barriers to keeping it as successful as it could or should be.”
Adam Van Witzenburg, president and CEO of Elgin, IL-based National Gift Card, notes similar usage numbers for e-gift cards. “E-cards in the incentive world make up about 10 to 12 percent of our business … I think there can be challenges with information technology, and it takes time to integrate; there’s a cost involved.”
For Des Plaines, IL-based SVM, digital gift cards represent only 3 percent of the company's total B2B sales. "Interest in e-gift products and the use of e-gift cards in B2B applications continued to see significant growth in 2013, ending up over 300 percent from 2012," says jim Speir, SVM vice president of sales. "That said, it still only makes up about 3 percent of SVM's total B2B sales as a majority of longstanding customers continue to use mostly plastic and are slowly migrating to e-gift products. The growth in e-gift sales is coming primarily from agencies that specialize in digital marketing and promotions, as well as newer technology focused companies that are creating digitally based reward and loyalty platforms and are looking to provide instant rewards for all types of activities, including online surveys, online purchases, etc."
At Corona, CA-based USA Connect, CEO Lee Nydell is seeing slightly more demand for e-gifting solutions in the B2B space. “We’ve seen a significant shift in consumers requesting e-gift cards versus traditional plastic.” He says that in 2011, 18 percent of its consumers chose an e-gift card over a traditional plastic card; in 2013, that number grew to 43 percent. “Digital gifting represents a convergence of social networking, prepaid transactions, and mobile commerce.”
While adoption rates for digital gift cards are still in their infancy and vary greatly, gift card solutions providers agree that the key to growing e-gifting is tied to advances in technology and delivery. At Portland, ME-based CashStar, President and CEO Ben Kaplan says that the future of e-gifting depends heavily on two things: “Continuing to invest in the tools and platform capabilities to support a range of different marketing campaigns and promotions, and continuing to invest in options that enable the gifting experience to be more personalized, engaging, and dynamic.” In December 2013, CashStar debuted Tactile Unwrapping, a new interactive module that lets gift card givers “wrap” an e-gift card; in March, it unveiled a new version of its digital gifting platform.
SVM, says Speir, has also developed a B2B e-gifting delivery platform that allows B2B customers to aggregate purchases for multiple brands into one simple file format. "It provides efficient customer service tracking and follow-up for undelivered emails, resends and order tracking," explains Speir. He adds, "We are currently seeing the most interest in brands like Amazon, Starbucks, Walmart, Toys 'R Us, T.G.I. Friday’s, Home Depot and iTunes. Since a significant amount of the interest is coming from technology based companies, there tends to be greater interest in retailers that allow the eGift to be redeemed online versus having to take the eGift card into the store for redemption."
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