Mobile Gift Cards
Gift cards are considered one of the banes of the holiday season due to the perceived inconvenient and impersonal user experience; however, their versatility ensures that they will always be a popular gift choice. The recipient can purchase anything they want with their card from that particular retailer. This year, retailers are using digital technology to create mobile gift cards, and allowing the recipients to personalize their cards and keep track of them on their cell phones.
By Michelle Fares, Digital Integration and Innovation
Every holiday season, shoppers reexperience their love-hate relationship with gift cards. In some ways, they are the perfect present: They allow the recipient to choose whatever item they want in the correct size, color or model. However, gift cards do carry a negative connotation. They are considered an impersonal choice, with little time or effort required on the giver's part. They are also easy to lose track of; in 2009, consumers lost $5.8 billion on unused gift cards.8
In many ways, giving and receiving gift cards can be a flawed user experience that is inconvenient, impersonal and difficult to control. But retailers are attempting to change this with a slew of personalized mobile gift card options that translate the physical experience of receiving a gift card into a digital experience where, in many cases, a physical card is not even involved.
American Eagle Outfitters (AE) is a retail store with a consumer base made up mostly of teens and young adults. For the 2010 holiday season, AE debuted its mobile gifting program. Users can purchase gift cards either on the American Eagle website or on the company's official Facebook page. The company will then send a text and a backup e-mail to the recipient with a brief message, the gift card number and a PIN. If a user purchases a gift card through the Facebook page, they can grant permission for a Facebook app called wGiftCard, which lets the user designate the Facebook friend that their gift card is going to, include a picture with the gift, and post a notification on that friend's wall.
Target has developed a gift card program for smart phones where users can interact with a card on their phone in various ways. By logging in to Target's mobile website, gift givers can purchase a gift card and send it electronically to the recipient. Once the recipient receives the card, they can present their phone to be scanned at any Target store when they are making a purchase. The site also allows recipients to keep track of the balance of their gift cards and share a card that they have received with someone else. If the recipient receives a plastic gift card instead of a digital one, they can input the card number into their phone and get the same functionality. These cards can be purchased by visiting Target's gift card site on a Web-enabled phone.
Implications and Action Items
The transition of gift cards from physical, impersonal objects to digital and personalized gifts can serve as an example for companies that strive to offer their customers enhanced personalization.
- Find ways to personalize a digital experience with photos or messages.
- Take into account non-traditional shopping portals, such as Facebook, for making purchases and sending them to recipients.
- Consider the problems with a physical experience, and use digital mediums to eliminate them. Target's system allows recipients to use their phones to pay for purchases on the gift card, and also keep track of the card's balance. This does away with the hassle of keeping track of a card's location and value.
- Watch the mobile technology space for new developments in mobile purchasing across demographics.