Feature Article - May/June 2013

IGCC Roundtable

Mobile, Social, Virtual Top Choices for Gift Cards

By Deborah L. Vence

Solid growth in gift card incentives continues, and experts in the industry, including Incentive Gift Card Council (IGCC) board members, shared their thoughts on current developments, as well as what the near-term future holds in gift cards.

For our annual issue on the gift card industry, Premium Incentive Products magazine interviewed the following experts: Alex Calicchio, president of the IGCC, and president of C2 Consulting Services, LLC, Delray Beach, Fla.; Rich Killian, president of RK Incentives, Orlando, Fla.; Mindy Knight, merchant relations manager for Cabela's Corporate Sales Incentives, Sidney, Neb.; Adam Van Witzenburg, president, National Gift Card Corp.; and Marcell King, vice president of education for the IGCC and vice president of sales, product and international development, GIFTANGO.

Q: What are the latest trends in gift cards?

Alex Calicchio: As we have seen in the past, merchants are focused on researching and implementing programs in three areas: mobile, social, virtual (e-mail) gift cards. However, in order to support the growth within mobile and virtual cards, a bigger focus for many merchants is the overall strategy for their organization. How will companies support mobile payments at the POS and by what method (i.e., 1D barcode, 2D/3D/QR Codes, etc.)?

Rich Killian: We continue to see a steady increase in the areas of mobile, social and virtual gift cards. iPhone users are loving gift card applications that allow them to just have their phone scanned at the point of purchase. However, in the B2B market, we are still finding that plastic cards are outselling digital rewards. Gift cards are being used much more for customer loyalty awards, such as credit card programs, casino awards and even on Facebook. All of these are huge now in buying/selling distributing gift cards.

Mindy Knight: The latest trend for us is the personalization options offered for the recipient. Co-branding with the merchant to increase brand visibility. The ability to personalize a card for the recipient also allows for a lasting value/impression when given the gift.

Adam Van Witzenburg: The trends in gift card sales are similar to those we have seen over the past few years. There is a slow but steady migration from plastic to virtual product. We are just now starting to scratch the surface on mobile. I would say the most dramatic trend or development we are seeing are the new, creative and exciting things being done with fulfillment. We are being asked for creative ways to drive behavior via custom carriers or unique distribution vehicles.

Marcell King: Although we still see general digital gift card volume growing at exponential rates, the biggest trend we're noticing is the growth of digital gift cards views from mobile devices. A recent look at our March data shows that 33 percent of e-gift cards were viewed from a mobile browser compared to 27 percent in December 2012. We believe that the increase of U.S. smart phone penetration over the past year has contributed significantly to an increase in the number of consumers reading e-mail and interacting with their Facebook pages from their smartphones, leading to an increase in the number of views. With that said the ability to click on the gift card link in the e-mail or from an SMS text and immediately view the e-gift card in a mobile-optimized format is increasing in importance.

The increase in mobile views of the e-gift cards leads to three additional areas of importance to consider—the ability for the consumer to: redeem the e-gift card from a mobile device; save the e-gift card to a mobile wallet on the smartphone for easy access; and purchase e-gift cards from a mobile device. If you're a brand or distribution partner who isn't already considering mobile strategies for your gift card program, now is the time to do it.