The big debate

Virtual reality

Digital technologies have changed the way we work, communicate and shop – and they’re helping to transform the gift card and stored value industry


Everywhere you look people are using digital technology to work, interact, research and purchase.

Digital interactions are now an expectation among employees and consumers, and they hold significant benefits for the gift card industry. “Digital technologies are central to the gift card and stored value industry and they’re going to become more pervasive,” says Jonathan Grey, Managing Director of Ovation Incentives. “There are three main reasons for this.

First, the retail and incentive industry is changing from one that’s been controlled by domestic brands to one that’s highly influenced by international brands. Consumers in different countries are now seeing the same brands on the high street and they can shop online at brands that will deliver around the world. They expect to be able to spend their gift cards anywhere, and that can only be achieved through digital data and information management. “In a world of tighter margins and intense competition, there is also a desire to reduce the cost of programme management, from both a B2B perspective and in the prepaid and stored value supply chain.

Digitisation creates massive cost savings in terms of distribution and advantages in terms of the volume that can be handled and the data that can be extracted on the use of digital gift cards. “The third major trend is consumer demand. Everybody communicates digitally now, and that has had a tremendous impact on the gift card and stored value market. People expect to be able to use digital products to spend value instantly, at a time and place of their choosing.

Digital gift cards and stored value solutions match those expectations.” Andrew Johnson, CEO of ngcEurope, says digital cards open new opportunities for issuers. “Evidence from the US shows that rather than replacing plastic cards, digital opens the door for brand new customers in different demographics and age groups, and that’s one of the big advantages to retailers.” “e-gifts are gaining ground in both the consumer and corporate environment,” says Tracy Aslam, Director of Jordan Media.

“Retailers have seen massive sales increases following the introduction of e-gifts, with one of Jordan Media’s own retail clients experiencing a 41% increase in online purchases in one month alone. Digital solutions now enable consumers to place their own photographs and videos within their chosen design template, making the gifting experience much more personal for both sender and receiver.

The recipient can even ‘share’ their gift experience with their social media contacts, delivering greater brand exposure for the retailer. Employers and other corporate users benefit from the immediacy of delivery and recipients experience instant gratification.” 

Work in progress
Johnson says that while most retailers recognise the opportunities offered by digital, there are still some perceived barriers to overcome. “Some retailers have the perception that if their website can’t accept a gift card for online purchases there is no point in selling them online. Our experience at ngcEurope is that, particularly from a B2B perspective, it’s all about receiving a reward instantly.

For many people the redemption part is still about visiting the store to spend their reward. There can also be a perception that you need lots of technology to make it work, but that’s not necessarily the case – if you can scan a barcoded gift card you can scan a print-out from a digital card.” Carey Benn, CEO of OneFromMe, says that while digital, and especially mobile, is increasingly engaging consumers, some retailers are not yet ready to take advantage. “Consumers expect to be able to complete any transaction, gift or purchase quickly and easily directly from their phone.

Technology that is currently available would theoretically allow one-step sending of an open-loop gift card/value, redeemable in any internetconnected retailer via NFC tap-and-pay. Unfortunately at the moment retailers’ POS/ hardware solutions are still segregated and closed-loop, and open-loop providers have not harnessed the power of internet/mobile apps to provide an easy customer journey for redemption.


Looking ahead, digital stored value applications will integrate more in a mobile environment as the industry matures, says Grey. “The mobile element of the interface of a gift card or stored value product will be central to the development of the industry. But whether that will be aligned in a wallet technology, an NFC technology or a payments gateway application remains to be seen. There’s going to be different standards and practices and there is no unified approach.”

“We’re talking to several customers who are looking for in-app delivery which will enable them to take advantage of technology to enhance how that digital gift card is delivered,” says Johnson. “Branding is particularly important and digital holds lots of advantages in that respect. For example, a corporate reward could include an embedded message from the chairman with a video.

There is some way to go in that instance, but these are the types of opportunities that companies can take advantage of. As the technology develops we may also see retailers using the advantages of digital to move into other areas such as product-specific offerings and promotional opportunities.” With retailers and corporate customers increasingly looking to realise the benefits, 2016 could see digital gifts reaching a critical mass, says Johnson. “Digital has been around for some time, but the advantages can clearly be seen and experienced now.

By this Christmas we’ll see many more retailers looking at digital, both from a consumer and a B2B perspective, and it will become the norm in the same way that plastic gift cards have.

Latest big debate

Virtual reality

Digital technologies have changed the way we work, communicate and shop – and they’re helping to transform the gift card and stored value industry

Mind the gap

To what extent are the perspectives, motivations and needs of different generations changing the reward and incentive landscape?

Star spotting

Why is it so important for employers to recognise the success and hard work of employees, and how can recognition…

Personal touch?

Does personalisation of rewards make for a ‘better’ reward experience and, if so, what are best ways to give rewards that say ‘from me to you’?

Taking the motivation path

How can businesses find ways to motivate their diverse workforces without having significant impact on the bottom line? Over to our panel of industry experts…

Question of loyalty

Just how do you attract, retain and keep good employees loyal to your business? Loyalty experts give their thoughts on the best techniques…