During the peak of the Coronavirus pandemic, while people were buying groceries and essentials, they were also persuaded to add one more item to their shopping cart– gift cards. Businesses have several reasons to offer gift cards to customers. Online gift card trends indicate that customers are also happy to support retail stores that they were fond of. E-gift cards and contactless gifting are the perfect foil for Covid-19 lockdowns, and more. In this article, we look at what makes gift cards a pandemic-proof business strategy.
What Makes a Business Pandemic-Proof?
You would have noticed that businesses which did not tank within the first few months knew how to offer customer support during crises. The objective should be to build a solid foundation rooted in business and marketing principles.
- When you create your business plan, make sure that it takes adverse health and economic conditions into account. Have an emergency management plan that will allow you to conduct your business even in the most difficult circumstances
- Make sure you have a solid online presence that makes it easy to go global within a short time frame
- As a responsible business owner, make sure you have health insurance for each of your employees
- Invest in technologies that will allow your business to operate smoothly. A software like 99minds automates your acquisition and retention strategy
Why are Gift Cards Pandemic-Proof and a Cash Cow?
Small businesses were the ones that were affected the most during the pandemic. Most of them were forced to shut down, and unless they were deemed necessary, they stayed shut for a long time. According to a survey, more than 43% of all businesses were temporarily closed. This impacted their cash flow, and many of them didn’t have a leg to stand on by the time the virus had lost its sheen. If given the chance for businesses to stay afloat without opening their stores, how could it have been done? The answer is an unlikely one– gift cards.
Let’s look at pandemic-proof business strategies made possible by gift cards.
Increased Cash Flow:
When a customer purchases a gift card from your store, there is an associated overspend when the recipient uses the gift card. The average customer spends $59 more than the value on the gift card. Another reason why it helps with cash flow is that the customer doesn’t reduce your inventory when they purchase a gift card. Why? Because gift cards are usually given to someone else as a token of love or appreciation. It will be a few weeks or even months before the recipient decides to use the gift card.
During the peak of the Covid-19 pandemic, there couldn’t have been a better strategy if customers were to use them. With more than two million people with unused gift cards, it would not even be surprising if the money associated with the gift card remains that way.
Gift Cards are Flexible:
Yes, you can complete the sale of a gift card completely remotely. Since the customer isn’t going to immediately use the gift card that was sold, the transaction is over. Can you think of any other product that wasn’t affected during the pandemic at all? The only type of product that didn’t have any repercussions because of the virus-enforced lockdowns would be digital products.
Even the most prepared business would fail when faced with a catastrophe that was unheard of. During the peak of Covid-19, most businesses would have realized that going digital is the only way out for them. Many could make the transition, but those who couldn’t, saw themselves fall flat.
Let’s assume the case of a business that cannot open at all because the goods had to be sold and taken away physically. This is where digital gift cards work. Why would someone buy gift cards when they cannot get the product? By sweetening the deal for the customers, you can expect people to buy from you. Even if the product were to be transported only a few weeks from now, the chance of getting a meaty discount would convince the customer to make the purchase. Gift card marketing during a pandemic could be as simple as offering a clever discount.
You Can Reach Out to a Newer Audience:
For a business to be pandemic-proof, it has to allow you to expand the target market without a gigantic overhaul. Businesses that can tap into newer markets and geographies can be considered as one that is pandemic-proof. Gift card sales during a crisis can only be done when there is ample efforts toward that direction. You must come up with marketing campaigns that highlights the benefit of getting your brand’s gift card. It should clearly explain the benefits associated with it. Potential customers must know that they are being given a huge incentive or discount on the gift card because of the incumbent circumstances. This is how business continuity with gift cards is possible.
Creative gift card promotions is the need of the hour, especially when you are trying to reach a newer audience. The number of digital gift card success stories for your store can be increased by a huge margin if you come up with the right deals on it.
Sell Without An Inventory:
Gift cards are the only products that can be sold without having to take anything from your inventory. That’s because the gift card itself is the product, although it comes along with a few more strings attached. When you look at it, a gift card is the perfect product that eCommerce stores should push during a crisis. Gift card adoption in challenging times is only possible when you have the right technology and marketing know-how. You can easily increase your bottom line by selling gift cards alone. Since it doesn’t require anyone to walk in to the store or deliver a physical product, pandemic-driven gift card growth is possible because it is the best product that you can sell now.
By Incorporating Gift Card Loyalty Programs:
Having a loyalty program which persuades customers to purchase from you periodically is one of the best retail survival strategies. While a majority of the customers wouldn’t make a purchase, you can make it interesting by incorporating crisis-resistant revenue streams. Businesses must find ways to include products that can be sold with the help of gift cards. For example, you can create an offer on the annual maintenance fee by issuing gift cards that helps the customers save a few dollars. The only catch to have gift cards as a cash flow solution is to come up with services or products that can be bought with the help of gift cards, that too at a discount.
Gift cards are a form of branded currency and it is valuable. Even if day-to-day business were to halt for a brief period, you can still sell gift cards. That’s one of the most underrated benefits of having a gift card. Business resilience with gift cards would not have been thought about at all. With gift card program optimization, adapting to economic challenges will be less of an issue. Even the simple act of selling gift cards for revenue stability shouldn’t be looked down upon. Your main objective as an eCommerce store is to stay afloat. Selling E-commerce gift cards in a crisis is one of the best ways to stay afloat.
If you are looking to incorporate gift cards into your store, the 99minds team will be more than thrilled to help you with the setup. Since we have been working with hundreds of eCommerce businesses over the years, we will be able to help you leverage gift cards for your promotional campaigns. With our gift card strategy, no pandemic can bring your store to its knees.