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8 Ways to Work eGifting Marketing Magic This Holiday Season and Beyond

8 Ways to Work eGifting Marketing Magic This Holiday Season and Beyond. Today’s Speakers. Lauren Freedman Founder, CEO, the e-tailing group Kathleen Goodwin VP of Marketing, CashStar. The Digital Gifting and Incentives Company . Industry’s first digital gifting and incentives platform

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8 Ways to Work eGifting Marketing Magic This Holiday Season and Beyond

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  1. 8 Ways to Work eGifting Marketing Magic This Holiday Season and Beyond

  2. Today’s Speakers • Lauren Freedman • Founder, CEO, the e-tailing group • Kathleen Goodwin • VP of Marketing, CashStar

  3. The Digital Gifting and Incentives Company Industry’s first digital gifting and incentives platform Powering 75+ leading retailers B2C and B2B strategies Boost online and in-store sales Acquire, retain and re-engage customers Build loyalty and brand preference

  4. The Voice of Cross-Channel Merchandising Straight talk from “in-the-trenches” online merchandising experts • 15 years e-commerce consulting • Fortune 500 client projects • Extensive cross-category expertise • Proprietary research studies • Author, “It’s Just Shopping” • 50+ years experience

  5. Today’s Agenda • Holiday Forecast • Gifting is a Retail Staple • Digital Gifting is a Workhorse • 8 Tactics to Work Gift Card Magic • Visibility & Seasonality • Marketing Optimization • The e-tailing group Digital Gifting Readiness Checklist

  6. 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 befrugalthis holiday season • 29 days to market post-Thanksgiving • Competition will remain fierce among multi-channel merchants • Cross-channel investments will continue to pay off 1comScore 2eMarketer 3NRF

  7. II. Gifting is a Retail Staple Gifting has already become a $300B business, representing 10% of the $3T retail economy • 1Unity Marketing

  8. Importance of Gifting E-tailing group 2010 Annual Merchant Survey Q10

  9. the e-tailing group Merchants: the EG100, 4Q09 1-800-flowers Diapers.com King Arthur Flour Sephora Aeropostale Dick’s Sporting Goods Kohl’s Shop NBC Amazon .com Discovery Channel L.L. Bean Shop PBS American Girl Drs Foster & Smith Lamps Plus Skecher’s Apple Drugstore.com Lancôme USA Solutions Armani Exchange eBags.com Lands’ End Sony Style Aveda EBGames Lego Staples Bare Necessities eToys Lowes Sundance Barnes & Noble Famous Footwear Macy’s Target Bass Pro Forever 21 MoMA The Avenue Bath & Body Works Frontgate New Egg The Children’s Place Bed Bath & Beyond Gaiam Nordstrom The Container Store BEST BUY Gap Office Depot The Home Depot Blue Nile Gardener’s Supply Orvis Things Remembered Bluefly Garnet Hill Overstock Toys ‘R Us Borders Giggle PetSmart Under Armour Brooks Brothers Godiva Polo Urban Outfitters Brookstone Golfsmith Pottery Barn Victoria’s Secret Buy.com Green Mountain QVC Vitamin Shoppe Cabela’s Harry & David Radio Shack Walgreen’s Clinique HP Home & Home Office RedEnvelope Wal-Mart Coach HSN REI Williams-Sonoma Cooking.com iRobot Road Runner Sports Wine.com Crate & Barrel J.Crew Saks Fifth Avenue Zales Crutchfield JCPenney Sears Zappos

  10. 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 Source: 4Q09 EG Mystery Shopping

  11. Gifting/Gift Card Evolution Points to Opportunity

  12. The Gift Card Should Keep On Giving Consumers prefer choice relative to type and redemption option Merchants can accommodate both format and channel flexibility with cross-channel redemption 4Q09 EG Mystery Shopping

  13. Personalized and Customized Gift Cards Evolve • 1 in 5 merchants offered custom capability in 2009 • An array of engaging house designs available • --OR— • Personalize your own card • Photo • Image • Video • Message

  14. 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

  15. 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

  16. 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

  17. Why Growth? Why Now? The “Digital Age” Has Arrived. It is a primary communication and commerce channel 78mm iPhones 309mm online purchases $131mm in eBook sales 35% of all online adults visit a social networking site daily 3mm+ iPads $200mm iPhone applications sold every month The average dwell time on Facebook is 6 hrs per day Source: CNET, Nielsen Research and Apple

  18. Alternative Payments Already in Play 4Q09 EG Mystery Shopping

  19. Merchants Make Impressions Responding to Consumer Interest In Social Media E-tailing group 2010 Annual Merchant Survey

  20. Mobile Embraces “Anywhere, Anytime” Buying 23% of US mobile-phone users have smart phones eMarketer

  21. III. eGifting is a Core Strategy Digital gift cards were seen as the ONE thing merchants will invest in for Holiday 2010 2010 Shop.org Holiday Strategy and Planning Guide

  22. 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. 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% Retailers are embracing digital solutions that protect margins and safeguard customers

  23. Retailer Strategic Goals E-tailing group 2010 Annual Merchant Survey Q3

  24. 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

  25. IV. 8 Tactics to Work Gift Card Magic

  26. Tactic #1: Incenting Customers With Gift Cards • Optimize existing customers • Encouraging higher order values has performed • Reward big spenders to drive repeat business • Foster customer relationship building • Deliver efficient re-engagement

  27. Tactic #2: Customer Issue Resolution Tool • Resolve customer service issues – perfect solution for any customer service challenge • Fulfill warranty obligations • Returns and refunds

  28. Tactic #3: Rewards Programs • 56% of EG100 merchants have a rewards program • Stimulates buying • Increase visits to web and brick-and-mortar locations

  29. Tactic #4: Re-engage Lapsed Customers • 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

  30. 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

  31. Tactic #6: B2B Corporate Gifting • 46% of the EG100 have a Corporate Gifting initiative • Recipient preference for digital gift alternative • Efficient purchasing experience

  32. 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 1Prepaid Press

  33. V. Visibility & Seasonality

  34. eGifting Is Multi-Dimensional From gift centers to navigational visibility, all locations should be in play

  35. Structure Your Holiday Promotional Calendar Around Key Dates Q4/09 Top $ Digital Gifting Days • 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 Q4/09 Top Revenue Days *2009 CashStar Retail Study

  36. 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

  37. The Power of Last Minute Digital Gifting “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.

  38. Gift Card Buy Page

  39. VI. Marketing Optimization Why Social Media Matters

  40. Digital Gift Card Provide Multiple Delivery Touch Points

  41. 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

  42. Use Social Media To Engage and Attract New Fans Hours

  43. VII. the e-tailing group eGifting Readiness Checklist • Review your current plan • Brainstorm gifting strategies • Integrate digital gift cards in your strategic holiday mix • Develop compelling creative tactics • Build out calendar with key selling dates • Explore a variety of strategies • Partner wisely • Deliver best-in-class customer service year-round

  44. To learn more about CashStar and to get a FREE digital gifting analysis, contact PhilMoran@cashstar.com or Kgoodwin@cashstar.com • To learn more aboutthe e-tailing group, go to www.e-tailing.com • Or contact Lauren Freedman at LF@e-tailing.com

  45. Thank You! A FREE copy the e-Tailing Group’s ecommerce reportwill be automatically emailed to you. .

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