Marketing Momentum  Blog

Strategy, behavioural analytics and insight - served with a creative twist.


The gift of promotions - making a difference to a retailer's bottom line

Gift cards can make a substantial difference to a retailer’s bottom line when regarded as a tool and not a product. 

One of the most successful ways this tool can be used is through promotions. And this doesn't just mean promoting the gift card range. Gift cards can be used as an integral part of any promotion concerning any or every product or service offered by a retailer or business.

So, how could they work?

1. Gift card promotion

Reward your customer with their own gift card when they spend a certain amount on a gift card. For one of our customers last year, the promotion worked by rewarding customers with their own $20 gift card in reward for buying a $100 card. The promotion was widely advertised online, in store,  in print ads and circulars, through social media and via email. The retailer saw a 28% increase in gift card sales and a 42% redemption rate. The chain increased sales by $56million over the course of this promotion.

2. Christmas promotion

The key point of a Christmas promotion is that it can be tied to a specific time period and can be used to help retailers shift stock prior to Christmas and before any discounting needs to be applied to help empty the shelves ready for the new season’s goods. Any of the other four promotional approaches can be used, but the Mystery Value has proven good results as shoppers have responded well to the element of 'gamification' associated with the mystery.
 

3. Frequent shopper rewards programme

Retailers can use this promotion to reward customers for buying from them. Customers have to register to be eligible (providing retailers the opportunity to gather information on their market) and will be rewarded with a gift card worth a percentage of their spend over a specific period (for example 10% for every %50 spent over a two week period). 

4. Product based promotion

Product based promotions are funded by suppliers. All the retailer needs to do is set aside any promotional income provided by suppliers and manufacturers and use this to fund branded gift cards to promote that brand or product. For example, buy a XX product from us today and receive a free XX gift card to spend on any XX product before the end of the month. One of our retailers reported a 72% redemption rate on this promotion and increased sales of $85 million.

5. Mystery value promotion

Mystery value promotions involve giving customers a gift card as a thank you for shopping with us. The customer doesn’t know how much is on the gift card until they return to redeem the reward (they can’ check the balance online for example).

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