Going by the success of the concept in the countries like US, major Indian retail players are gung-ho about gift cards. Retail biggies in the country are keen to implement this new marketing strategy, which has a potential to give their business a lift. Slowly but surely, retailers have started considering it, as they feel it is one of the smartest tricks to swell the number of loyal customers. Some Indian retailers like Future Group are evaluating the plus and minus points of the gift cards to woo more customers and increase footfalls to their stores. Landmark group has already embraced the concept.
Why it takes everyone’s fancy?
A gift card is a limited monetary equivalent or scrip, issued by a retailer or a bank. It can be used as an alternative to gift. It is a plastic card which has a close resemblance with gift voucher, credit and debit card, with a magnetic strip and signature panel on the back. The difference is – the money loaded on the card when exhausted, cannot be topped up or used again (though in special cases it can be).
Gift cards issued by retailers and restaurants, can be used only at their outlets. Retail gift cards come with expiration dates and some conditions and fees. These cards are also available online but are generally not safe. They may be counterfeit or may have been acquired illegally.
Gift cards are basically supplied by manufacturers of smart card to retailers and banks. An interested retailer needs to contact a smart card manufacturer. In India, there are a few known manufacturers like Bartronics India Ltd, CMS Infosystems Ltd, and MCT Card and Technology Private Ltd.
A tool for retailers to spur sales
With the positive sign of growth in the organised retail sector in first and the second quarters of financial year 2009-10, many major players are contemplating the idea of introducing gift cards within branded stores, hypermarkets and specialty stores.
Nandini Sethuraman, Head of Marketing at Marks and Spencer, says, “It is a good tool to give the customers the gift of choice. So, the recipient of the card is able to choose whatever he/she wants. It also helps to bring new customers to the brand. There is an incremental sale for the brand. It is definitely a good tool.”
Other reason why retailers find a gift card to be a useful marketing tool is that it coaxes even a non-shopaholic to go to the store and shop as the recipient may not want the card to go waste without being used. If a first-time shopper (recipient of a gift card) stumbles upon a brand and finds it interesting, he/she is certain to come back to it. What’s more, it encourages the word of mouth publicity and brings in new customers.
Are consumers going to like it?
Choosing a gift for your family members, friends or lovers is not always an easy task. It could be strenuous running from one store to another, moreover, the gift that you choose may not match the taste of the recipient. In such a situation, gift cards come in handy and lessen one’s burden of searching the ideal gift. Besides, it adds a personal touch to the gifting. The most satisfying aspect of all is the freedom that a recipient gets to choose from the varied range of items according to his/her preference or use it the way, he/she wants to. It is expected to pick up sooner than later as it is a promising proposition for both retailers and consumers.
To sum up, the concept of gift cards is well poised to reach new heights and become a significant contributor to retail in India in the near future!