Driving Sales with Digital Gift Cards in Post Pandemic Australia

By Kristie Atkins

A Deep Dive into Australia’s Gift Card Market

Australia has fared much better from a coronavirus-led recession than most other countries, but many businesses in key sectors such as retail and hospitality have been (and are still) hurting.

While generally retail sales have strongly rebounded during the Aussie summer, some businesses and particularly those in CBD locations, have suffered through trading declines of up to 90% in the past year.

As we begin to find our new normal, more and more marketers are seeking agile, contactless ways to drive buyers back into their locations. Mobile gift cards are ideal tools for these kinds of campaigns.

You fire off an SMS link to a customer, they click on it and download their gift card for use in store or online. Users can just tap and go and live redemption information appears on their handset.

A Deep Dive into Australia’s Gift Card Market

The solution is COVID safe and program owners can say goodbye to endless customer service queries about gift card balance checks. However, it’s reasonably early days for the technology and markets like Australia don’t have many providers.

As such, there is frustration because digital gift card programs don’t have the same level of pace or commercials as reasonable program owners might expect in 2021.

Here are some common themes we’re routinely hearing from them:

1. It’s digital and you just send it to a phone, so can our campaign start next week?

With dynamic store openings and closings because of corona-led shutdowns, when trading has been able to resume, outlets are desperate to get shoppers back in the door. They’ve been choosing mobile gift cards as a way to quickly deliver “instant cash” or “spend and be rewarded” programs to loyal shoppers to drive them back in to buy. Yet with up to two months wait in Australia for mobile handset and scheme providers of pre-paid digital products to just approve campaign artwork and SMS message copy, “fast” campaign delivery can be somewhat challenging.

2. Can’t you just make our physical gift card a mobile one?

Sounds simple but no. We’ve sat in meetings with frustrated sales and marketing leaders of some of Australia’s biggest and best-known hospitality and retail companies that are being forced to make calls more quickly than ever due to trading conditions, but saying they want their new fully branded, mobile gift card being sold or sent to customers immediately is very difficult.

3. The supermarkets have been doing well but my local fashion store, butcher, baker, hairdresser, cafe (etc) really needs help.

We’ve been working with key Australian property and shopping centre companies that have really got behind some of their tenants to help them survive. They’ve been sponsoring “cash” incentives to drive shoppers into specific stores that have been struggling. Yet during the pandemic, the ability to deliver closed or restricted loop digital gift card programs in Australia has been removed by the schemes. They say they want the market to view their products as having no restrictions as to where they can be accepted. That means you can cosmetically direct customers to specific retailers, but we’ve been stopped from being able to physically block redemption, using the available technology. The introduction of “private label” gift card products by the schemes into the Australian market this year will address this issue, but unlike other countries, we’ve been waiting a long time for private label.

A Deep Dive into Australia’s Gift Card Market

4. There’s no plastic to produce and distribute so why is digital so much more expensive?

For those of us old enough, you may remember when buying a CD would set you back more than $30 AUD. With the advent of digital music and streaming services transforming that industry, that’s no longer the case. Mobile gift cards are the same. They’re new. The technology has been expensive to develop, there have only been a handful of companies investing it and they’re looking for payback. As contactless becomes the gift card product of choice, pricing will become more competitive.

5. Fraud is no longer just part of the discussion, it’s often the focus of the discussion.

The mobile gift card user experience is great. It’s convenient, the contactless nature makes it safer and you can wholly personalise delivery via tailored SMS. However, as it’s sold to customers or claimed by them almost entirely through “card not present” transactions, having experienced thinkers to support your activity and the right fraud prevention mechanisms in place is more important than ever.

Australians are famous for being early adopters of mobile technologies and COVID-19 has accelerated demand even more. A further 20% growth in digital gift card products is expected in the next three years despite some gift card program owners already having over 60% digital penetration.

The question is whether the providers of the technology can deliver even better user experiences and more cost-effective solutions at the same pace as which customers are moving.

A Deep Dive into Australia’s Gift Card MarketKristie is Managing Partner of Australia’s specialist customer acquisition and retention business Wink, having also previously served as Managing Director in renowned marketing solutions business Edge (now owned by Blackhawk Network), as Chief Operating Officer of Waivpay, Chief Commercial Officer for marketing services giant Ovato and Director of Sales for Event Hospitality & Entertainment. A dynamic business growth and commercial leader, Kristie is a Certified Practicing Marketer, fellow of the Australian Marketing Institute, head judge of the Awards for Marketing Excellence and member of Australian Institute of Company Directors. Kristie is also on the board of Restaurant & Catering Industry Association Australia, the advisory board of growing international fashion company Azura Runway, the Foundation board of leading medical research institute HMRI and chairs HMRI Sydney Foundation.