India recently celebrated Raksha Bandhan, a festival celebrating the bond between brothers and sisters. With this the long festive season in the country has arrived and upcoming festivals like Ganesh Chaturthi, Dussehra, Diwali, Christmas, followed by New Year celebrations and Sankranti in the new year are big events. The next few months are going to be huge focus areas for India’s retail sector, which is already one of the biggest contributors to the economy and expected to grow to $2 trillion by 2032 driven by increased growth in rural consumption and the rise of an aspirational and young middle class. Last month of July is a good indicator of the prevailing positive consumer sentiment in the country as retail businesses have reported a 36 per cent increase in their sales as compared to the same month in the previous year, as per data released by the Retailers Association of India.[1]
This is the perfect time for retailers to think about driving sales as well as fostering loyalty among their customers. Here are 5 reasons how Gift Card programs help retail businesses:
#1. Drive Sales
In this competitive era when the cost of acquiring customers is high and retaining them is even more challenging, Gift Cards do help get new customers (the recipients) and also get repeat sales from them.
#2. Foster Customer Loyalty
The COVID-19 pandemic has also led to a seismic shift in brands preferring prepaid Gift Cards as they realise its importance in an unpredictable and touch economy. Industries that were severely affected due to the prolonged lockdowns such as travel, hospitality, and restaurant industries found prepaid Gift Cards to be a great medium to infuse cash flow in their businesses.
#3. Used for Rewards and Recognition
Today, shoppers want to be in control, be it deciding the mode of payment at the time of checkout or opting to pick a gift of their choice which is made possible through Gift Cards. Gift Cards give an opportunity to retailers to sell their branded prepaid cards to companies looking to invest in this new-age business boosting medium of gifting as a part of their corporate rewards and recognition program.
#4. Digital Gift Cards
Say goodbye to the costs associated with sending physical gift cards as digital gift cards are now soaring in popularity. Most businesses today prefer the convenience associated with subscribing to digital gift cards and the easy and secure redemption process for the end user.
#5. Increase Brand Awareness
Gift Cards are a great marketing medium to woo potential customers. Your customers become your brand ambassadors as they gift your branded card to their friends and family, thereby helping your business reach out to an untapped set of users in a cost-effective manner.
With changing consumer behavior, retailers must adapt to the changing times. The consumer sentiment of today merits an investment in digital products to aid business growth and gift cards are certainly a powerful medium to do just that. After all, every gift card wins retailers two customers for sure.
(The author of this article is Sunil Param, Head of Content and Communications at Pine Labs. Views expressed in this article are that of the author.)
[1] https://www.cnbctv18.com/economy/retail-sales-food-and-grocery-footwear-furniture-consumer-goods-jewellery-14500282.htm
