Will e-gifting replace gift cards?
Gift cards may be considered less crude than cash, but are often seen as less exciting and meaningful as providing a tangible gift. Loop Commerce’s e-gifting solution promises the safety and ease of a gift card in a more personalized package.
With Loop e-gifting, gift givers head to a participating retailer’s website, select a product and then send it by providing only the gift receiver’s e-mail address. Recipients receive notifications of their gifts and are directed to the retailer’s online store to accept them. Recipients can then configure gifts to suit their preferences, or exchange them before having the gift shipped to the address of their choosing.
Two-thirds of the products purchased through Loop Commerce end up being kept by the recipient, either as originally specified or with a tweak, such as a different size or color, according to CNBC.
Marc Metrick, president of Saks Fifth Avenue, which earlier this year partnered with Loop Commerce, told USA Today, “It eliminates the guesswork from gift giving, and helps our customers secure their gifts right up until the last shopping days of the holiday season.”
Loop Commerce’s other major clients include Macy’s, Neiman Marcus and Coach.
Retailer’s promised benefits include:
- Incremental sales: Loop Commerce has found that those redeeming gifts often opt to exchange it for something more expensive or add more items to their order.
- New customer acquisition: Eighty percent of gifters and 90 percent of recipients are new to a retailer’s site, according to Loop’s findings.
- Fewer returns: Being able to adjust sizes and colors or exchange gifts greatly reduces the likelihood of a costly return.
- Increased loyalty: Both the gift givers and recipients appreciate the step-up from a gift card.
In a column for Internet Retailer, Roy Erez, CEO of Loop Commerce, noted that recent studies show that 56 percent of consumers are reluctant to buy or do not buy gift cards for all or for some of their gift purchases. He wrote, “These consumers prefer to gift items that are perceived as personal and thoughtful.”
- Loop Commerce
- Loop Commerce secures additional $16 million funding to meet burgeoning market demand – Loop Commerce
- Retail technology promises to get her the perfect gift every time – CNBC
- Retailers eye a very merry Christmas – USA Today
- How to overcome shopper hesitations to buying gifts online – Internet Retailer
DISCUSSION QUESTIONS: Do you see e-gifting as a viable, more personal alternative to gift cards? What are the pros and cons of such as a solution for shoppers and retailers?