Why People Love Gift Giving - Retailer

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Gift giving is a universal way to show interest, appreciation and gratitude as well as strength bonds with others. This article has shown the psychological benefit from gift giving and analyzes why …

Gift giving is a universal way to show interest, appreciation and gratitude as well as strength bonds with others. This article has shown the psychological benefit from gift giving and analyzes why people prefer the gift card rather than gift in kind. This is why the Gift Market grows every year with double digit.
Retailers, if not yet started their gift business, should start Now. This document has shown the business benefits can be enjoyed by Retailers to start their gift card program. And more importantly, Gift Card is also the way for Retailer to convey their “Love” message to all of their beloved customers.

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  • 1. CERIDIAN STORED VALUE SOLUTIONWhy peoplelove giftgiving“Better to give than to receive, we are improving ourpsychological health and inner beauty” DOLOR SET AMET
  • 2. C HAPTER 1Why people love giftgiving“Giving a gift is a universal way to show interest,appreciation, and gratitude, as well as strengthenbonds with others”
  • 3. Psychology behind GiftGiving“ There is an enormous sense of satisfaction when seeing the ex-pression on the face of someone you’ve given a gift to. A way toexpress feelings, giving reinforces Smiling from the heart no matter give or take Receiving the most awaited gift from somebody 2
  • 4. Why people prefer gift in cashrather than in kind
  • 5. Economic theory on giftgiving This is why Gift Card Market is growing every year- “People prefer to receive gift card to buy what he/shereally wants”“According to the theory of consumer choice the con-sumer (i.e., the receiver of the gift) knows more aboutwhat will maximize their utility than the gift giver does.Accordingly, ifwe really care The girl cries because she receive the gift which is not she wantsabout allowingthe receiver of People who receive the gift card will have get morethe gift’s ability happiness than receiving the hard gift because theto maximize receiver will 100% know what they really love.their utility, weshould onlygive gift card ascash iv
  • 6. Empirical research on customer preference on Gift cards and Gift in kindHow important are each of the following Extremelyconsiderations when buying a gift card? ImportantThe ability to let the gift receiver select something they 91%wantThe ability for a gift receiver to select the size, color or 84%model of choiceThe ability to have an alternative if I can’t decide what 76%to getThe ability to give something other than cash or check 73%The ability to provide a special treat such as a meal or a 68%movieThe ability to give a last minute gift 63% Over 91% of customer want to give their gift receiver to pick what they really want and wider of choices.
  • 7. C HAPTER 2WhyRetailersneed to sellGift Card “Retailers offer gift cards because they are profitable product and consumers love to buy them”
  • 8. S ECTION 1Gift Card business to Re- Bespoke the brand image by featuring the merchant logotailer S UM M AR IE S 1. Steady Sales - All Year Around 2. Long Term Business Growth Selling 3. Customer Acquisition & Cross 4. Brand Recognition and Loyalty 5. Unbeatable ROI 7
  • 9. Gift Cards Not only Increase Sales But Also Steady SalesSales Increase not only during holiday season but yeararound More Steady Sales - People Prepaid for ProductsCards for “Birthday”; “Anniversaries” ; “Baby Showers” ;“Graduations” the list go on Lessens the validity cash between months 8
  • 10. Long Term Growth Engine Immediate and long term effect of Gift Card Program Sales Growth Engine - Long Term Effect 1st year : Avg 350% growth ; Unlike other retail product with the nature of short life cycle, Gift Card are 2nd year : Avg 200% growth ; a growth engine for many retailers 5th year : CAGR 67% => Gift Card Product Line would be 2%~7% of total sales 9
  • 11. The most cost effective tool for cross selling and customer acquisitionGift Card is powerful for up-sell and cross-sell The most Cost effective tools for Customer Ac- quisition 80% of gift card recipients have received the card to a store where they never shopped, 1/3 of those will become repeat shopper 10
  • 12. Brand Recognition and Brand LoyaltyBespoke the brand image by featuring the merchant logo Continuously remind customer of your Brand Type to enter textThey are a walking billboard carried in wallets for everyone to see Customer keep return visiting to your store 11
  • 13. Revenue Stream of Gift Card Lift your sales Unbeatable ROI Impressive ROI for Gift Card Program Typically, customer purchase goods worth 80% more than value of Gift Card Breakage and Interest Earning Typical Cost : <1% of total sales Total ROI : Avg > 750 Breakage : Avg 2%~8% Interest Earning : 30 days to 60 days 12
  • 14. Emotional attachment on Gift Card“Every Great Company would have different philosophy but wouldshare the same in common - “Love”Gift Giving is the most common way to express “Love”.For those Retailer, not yet start their gift business, should leverage theGift Card business to help their beloved customer to love each otherand to convey this message to all the world. xiii
  • 15. About Ceridian Stored ValueSolution
  • 16. World Leading Prepaid 20+ experience in Prepaid SolutionSolution “ We are a World Leading Prepaid solution service company, serving different customers in different retail industry all over the world”AC HI EV EM EN T SU MM ARY oss 45 countries1. Global Provider: 650+ clients acr Billio n transaction processed2. 550 MM+ card production ; 1.2 else3. More Top 100 retailers than anyone Ceridian SVS has been the pioneer since 1992 in providing prepaid solution service for 650+ customer worldwide in which 6 of top 10 retailers in USA 15
  • 17. SVS clients are all over the world and in different retail industry 16
  • 18. About Author : Kelvin Tai“ Seasoned IT/Business consultant on Financial and Retail industry, specializing on payment solution” xvii