e-Giftcards Market
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The document analyzes the market for electronic gift cards (eGift Cards). It finds that the eGift Cards market is growing rapidly at 26.7% annually and was worth $3.9 billion in 2010 in the US. Various factors are driving adoption of eGift Cards, including personalization options, avoidance of shipping costs, speed and convenience, and social sharing features. The ecosystem supporting eGift Cards involves platforms that handle delivery, tracking, and redemption, with email and social media emerging as popular distribution channels alongside mobile apps and barcodes at point of sale.
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e-Giftcards Market
- 1. 息 2012 Karthik Ethirajan, all rights reserved Market Research on eGift Cards Karthik Ethirajan January 2012
- 2. 息 2012 Karthik Ethirajan, all rights reserved 2 Agenda 1. eGift Cards Market 2. What is Driving Adoption of eGift Cards ? 3. Ecosystem and Typical Use Case 4. Social Sharing (1/2) 5. Social Sharing (2/2) 6. eGift Cards from Starbucks 7. Key Takeaways
- 3. 息 2012 Karthik Ethirajan, all rights reserved 3 eGift Cards Market Source: 1) Mercator Advisory Group 2) First Data and Market Strategies International eGift Cards is a high growth market especially driven by merchants & retailers US Gift cards market is $97.2B in 2010 US eGift Cards market is $3.9B in 2010 Growing at 26.7% eGift Cards Closed Loop Gift Cards Open Loop Gift Cards Issued by Merchants & Retailers like Target, Amazon, etc. Credit Card Networks like Visa, Amex, etc. Average # of Giftcards purchased 5.0 2.8 Average $ per card $58 $73 Average total $ spent $291 $203 Closed Loop is more popular and a bigger market than Open Loop gift cards 50% of merchant/retailers have enabled eGift Cards 95% of eGift Cards are delivered by email Target, Amazon.com, and Starbucks are leading examples of mobile based eGift Cards providers
- 4. 息 2012 Karthik Ethirajan, all rights reserved 4 What is Driving Adoption of eGift Cards ? Source: 1) E-tailing Group, CashStar, Sept 2010 Personalized gift o Add photo, voice/video greetings Ability to choose the gift amount in finer increments Avoid shipping and other related charges o Savings on operations and logistics for merchants Speed and convenience o Good solution for bulk giving by corporates Enhanced online security measures Notification when sent and received Growth of digital goods o eBooks, virtual goods such as badges, avatar, etc. Social sharing Evolution of an ecosystem supporting eGift Cards from system vendors to Smartphone apps to POS terminals
- 5. 息 2012 Karthik Ethirajan, all rights reserved 5 Ecosystem and Typical Use Case Mobile Email Social Sharing SaaS Model Tracking & Analytics Card Design Offer Management Reporting Customer Service E-Gifting Platform Barcode Scanner QR Code Redemption Code Distribution Redemption at POSPurchase eGift Cards Some components of eGift Cards ecosystem are mature while others are still emerging, giving rise to a hybrid implementation Retailer Website Merchant portal for consumers enable personalization of eGift Cards E-Gifting platform can be outsourced Although email remains as the primary channel, social media and mobile are fast emerging POS terminals are being upgraded to accept eGift Cards delivered on a mobile
- 6. 息 2012 Karthik Ethirajan, all rights reserved 6 Social Sharing Marketing campaigns for eGift Cards needs to be well integrated with social media to increase awareness and provide an alternate sales channel Social Media Targeted Campaign Create eGift Card tab on Facebook and provide a link to purchase eGift Cards Deliver eGift Cards on friends Wall on a set date Encourage fans to socialize their gifting experiences with their friends using Like button One of the top search items in Twitter is for promotions such as coupons and gift cards Encourage followers to tweet about special offers Hold sweepstakes to add followers
- 7. 息 2012 Karthik Ethirajan, all rights reserved 7 Social Sharing InfluentialBlogger Targeted Campaign Encourage consumers to check-in frequently and in as many locations as they move Create tribute badges to identify and reward brand advocates Tap into the extensive community of bloggers to spread the word about special campaigns Influential bloggers picked on CVS Give One Get One (GOGO) offer and drove 11.2M social media impressions over just two days, resulting in a 10x sales increase Social Media Thank you. We started in 1971 and are turning 40. Youve earned this badge and a chance to win a $40 Starbucks card. Sweepstakes ends 3/12/11. For complete details: http://sbux.co/TributeBadgeRules Celebrate Starbucks 40th birthday with a foursquare badge
- 8. 息 2012 Karthik Ethirajan, all rights reserved 8 e-Giftcard from Starbucks Personalized e-Giftcard with a message from the sender Choose any amount Social sharing Choose a different design for the e-Giftcard Set a delivery date Email or print
- 9. 息 2012 Karthik Ethirajan, all rights reserved 9 Key Takeaways User adoption of eGift Cards is accelerating Online shoppers spend more on eGift Cards than traditional cards Ability to personalize coupled with ease of use drives consumer adoption eGift Cards are fast becoming part of retailers cross-channel strategy Cost savings from issuing electronic gift cards versus physical cards Viral marketing potential from consumers sharing eGift Cards on social networks Ability to design creative and spontaneous promotional campaigns targeting specific customer segments Evolution of ecosystem supporting eGift Cards Proliferation of Smartphones and Apps has made mobile delivery a reality Barcode scanners at POS terminals has kept redemption process electronic Availability of SaaS vendors like CardStar to meet the technological complexities of building out eGift Cards infrastructure New Market Trends Delivering and sharing of eGift Cards on social networks Integration with m-Wallet and rewards program eGift Cards for buying digital and virtual goods