‘Tis the season… for virtual gifting. With the holidays rapidly approaching, retailers are planning their holiday buys and gifting strategies and virtual gifts should not be overlooked. One platform, GiftNow powered by Loop Commerce, takes this to a new, personalized level.
While not a gift card, GiftNow is an evolution from the lucrative digital card model. According to Card Cash, e-gifting is expected to hit $14 billion by 2017, comprising nearly 10% of the gift card market. Physical gift cards are growing at an annual rate of 6%, but digital gift cards are growing at an annual rate of 200%. In 2016 81% of top internet retailers offered digital gift cards. But GiftNow saw an opportunity to change the experience and up the ante.
GiftNow turns the generic gift card into a more personalized gift that involves the recipient in new ways. “Even with two-day shipping, there’s not always time to find the perfect gift, and a consumer might not even know a person’s address,” says Roy Erez, CEO and Founder of Loop Commerce. It always blew my mind how complicated it was to shop for other people and sometimes a gift card seemed too impersonal. GiftNow virtualizes merchandise the way PayPal virtualizes money.”
In short, instead of receiving a gift card from say, Neiman Marcus with a specific dollar amount on it, the recipient of a GiftNow gift “virtually unwraps” a shoe or handbag from a digital box, complete with gift message. The recipient then accepts or changes the color, chooses the size, or swaps out the item altogether. She can also add money to buy a more expensive item, adding to the dollar ticket for the retailer. When the item is finalized, the gift recipient then enters her address and the item ships from the store. Since the item is essentially picked out by the customer, returns are slim.
“We partnered with Loop to offer new and existing Neiman Marcus customers the next generation of frictionless yet thoughtful gifting experiences,” says John Koryl, President, Neiman Marcus Stores and Online. “Loop’s unique technology that brings all attributes of traditional gifting to the digital realm, the ease of integration, and their deep gifting know-how were key to our decision.”
While recipients have the option to swap out the gift, not all do, notes Erez. “We’re seeing that 7 out of 10 of the gifts that are received/delivered… are “hard gifts.” Roughly 65% are accepting the gift as is; 20% are accepting the same gift then tweaking it a bit; and only 15% are saying no thank you and trading it in for something else. Since nothing was physically shipped, it’s a seamless process that’s easier for the customer and the store.”
Senders might also be inclined to buy a higher-ticket gift since the actual item shows up as a digital image. Erez notes that Neiman Marcus saw its GiftNow transactions to be 50% higher than a traditional gift card buys.
While two-day shipping can be a lifesaver for traditional retailers, there’s still that holiday cutoff whereby anything shipped after that date will be late. “With GiftNow, we found that as long as the digital gift arrived on time, it was still considered on time, even if the physical gift arrived late,” says Erez.
While holidays are a highly anticipated date on the calendar, the last-minute shopper is legendary. According to GiftNow, on average, Males send last minute 85% of the time vs. females, 75% of the time. In addition, Facebook is constantly reminding consumers that someone’s birthday is coming… often with little time to shop for a gift.
“We are excited to offer our customers a new way to gift this holiday season. 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,” says Marc Metrick, president of Saks Fifth Avenue.
Another important day that’s captured with virtual gifting is Christmas Day itself. “While stores are either closed or beyond the shipping threshold, consumers can still receive virtual gifts,” says Erez, noting that Pick Up In Store might be an option but it can be inconvenient. “We found that with GiftNow, American Giant added 24% to its sales on Christmas Day.”
GiftNow, which works with stores like Saks, Macy’s, Neiman Marcus and more, has been aggregating gifting information. Below, some facts and infographics.