At a time when pandemic-era challenges have seen both consumers seeking value and merchants seeking business, the need to streamline, integrate and bring gift card and loyalty programs online to maximize their impact has never been greater.
Add in the fact that we’re on the cusp of the earliest, most virtual and most compressed holiday shopping season ever, and it’s hard to overstate gift cards and loyalty programs’ importance, Factor4 CEO Dan Battista told PYMNTS.
“During COVID-19, our gift card programs acted as interest-free loans because they enabled [small- to medium-sized businesses] SMBs to generate immediate revenue even while closed,” Battista said, calling them a seamless and touchless “lifeline to merchants.”
At the same time Battista said, with consumers “looking for value in this economic environment,” combining gift cards and loyalty programs just makes sense.
“The biggest attraction for SMBs is the ability to generate revenue and attract new customers,” he said.
Battista noted studies have found that shoppers who use gift cards typically spend 30 to 40 percent more than a card’s value when they redeem it.
More than 11,000 SMBs currently use Factor4’s online platform to streamline and revamp their gift card and loyalty programs to give consumers an omnichannel experience with them. But while many providers only offer in-store or virtual programs, Battista said offering just one channel for such programs is limiting to customers and results in a loss of sales.
He said merchants are best served when they connect with their customers in a variety of places and ways, and tailor gift card and loyalty programs to meet the needs of different customers who prefer to pay with different methods. Ultimately, seamless functionality that enables merchants to email or text gift cards directly to recipients is key, as it allows consumers to give gifts while staying at home.
An uptrend in eGift cards will eliminate the need to hand over a piece of plastic, although Battista noted that many consumers still prefer doing that anyway for presentation purposes.
Four Key Verticals
Although Factor4’s platform works with all verticals, Battista said he’s seeing the most urgent adoption of these programs by restaurants, salons, spas and retailers. He said that’s because those verticals are the most likely to have repeat purchases within short time frames, making them ideal for loyalty programs.
The fact that these same businesses also provide some of the most popular types of gift card programs makes adding omnichannel versions a “a no-brainer” for them, Battista said.
“We already know that the majority of consumers will be shopping online this holiday season and starting to shop earlier than in previous years,” he said. “So, we anticipate more SMBs utilizing mobile gift card and loyalty apps as contact-free payments become the norm.”
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October 13, 2020 at 07:00PM
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