The document analyzes the market for electronic gift cards (eGift Cards). It finds that the eGift Cards market is growing rapidly at 26.7% annually and was worth $3.9 billion in 2010 in the US. Various factors are driving adoption of eGift Cards, including personalization options, avoidance of shipping costs, speed and convenience, and social sharing features. The ecosystem supporting eGift Cards involves platforms that handle delivery, tracking, and redemption, with email and social media emerging as popular distribution channels alongside mobile apps and barcodes at point of sale.

1. © 2012 Karthik Ethirajan, all rights reserved
Market Research on eGift Cards
Karthik Ethirajan
January 2012

2. © 2012 Karthik Ethirajan, all rights reserved
2
Agenda
1. eGift Cards Market
2. What is Driving Adoption of eGift Cards ?
3. Ecosystem and Typical Use Case
4. Social Sharing (1/2)
5. Social Sharing (2/2)
6. eGift Cards from Starbucks
7. Key Takeaways

3. © 2012 Karthik Ethirajan, all rights reserved
3
eGift Cards Market
Source:
1) Mercator Advisory Group
2) First Data and Market
Strategies International
eGift Cards is a high growth market especially driven by merchants &
retailers
US Gift cards market is
$97.2B in 2010
US eGift Cards market is
$3.9B in 2010
Growing at 26.7%
eGift Cards
Closed Loop
Gift Cards
Open Loop
Gift Cards
Issued by Merchants & Retailers
like Target, Amazon, etc.
Credit Card Networks
like Visa, Amex, etc.
Average # of Giftcards
purchased
5.0 2.8
Average $ per card $58 $73
Average total $ spent $291 $203
Closed Loop is
more popular and
a bigger market
than Open Loop
gift cards
50% of merchant/retailers
have enabled eGift Cards
95% of eGift Cards are
delivered by email
Target, Amazon.com, and
Starbucks are leading
examples of mobile based
eGift Cards providers

4. © 2012 Karthik Ethirajan, all rights reserved
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What is Driving Adoption of eGift Cards ?
Source:
1) E-tailing Group, CashStar, Sept 2010
• Personalized gift
o Add photo, voice/video greetings
• Ability to choose the gift amount in finer increments
• Avoid shipping and other related charges
o Savings on operations and logistics for merchants
• Speed and convenience
o Good solution for bulk giving by corporates
• Enhanced online security measures
• Notification when sent and received
• Growth of digital goods
o eBooks, virtual goods such as badges, avatar, etc.
• Social sharing
• Evolution of an ecosystem supporting eGift Cards from system vendors
to Smartphone apps to POS terminals

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Ecosystem and Typical Use Case
Mobile
Email
Social Sharing
• SaaS Model
• Tracking &
Analytics
• Card Design
• Offer
Management
• Reporting
• Customer
Service
E-Gifting Platform
Barcode
Scanner
QR Code
Redemption
Code
Distribution Redemption
at POSPurchase eGift Cards
Some components of eGift Cards ecosystem are mature while others are
still emerging, giving rise to a hybrid implementation
Retailer Website
Merchant portal for
consumers enable
personalization of
eGift Cards
E-Gifting platform
can be outsourced
Although email remains
as the primary channel,
social media and mobile
are fast emerging
POS terminals are
being upgraded to
accept eGift Cards
delivered on a mobile

6. © 2012 Karthik Ethirajan, all rights reserved
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Social Sharing
Marketing campaigns for eGift Cards needs to be well integrated with social
media to increase awareness and provide an alternate sales channel
Social Media Targeted Campaign
• Create eGift Card tab on
Facebook and provide a link to
purchase eGift Cards
• Deliver eGift Cards on friend’s
Wall on a set date
• Encourage fans to socialize their
gifting experiences with their
friends using ‘Like’ button
• One of the top search items in
Twitter is for promotions such as
coupons and gift cards
• Encourage followers to tweet
about special offers
• Hold sweepstakes to add
followers

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Social Sharing
InfluentialBlogger
Targeted Campaign
• Encourage consumers to check-in
frequently and in as many
locations as they move
• Create tribute badges to identify
and reward brand advocates
• Tap into the extensive community
of bloggers to spread the word
about special campaigns
• Influential bloggers picked on CVS
Give One Get One (GOGO) offer
and drove 11.2M social media
impressions over just two days,
resulting in a 10x sales increase
Social Media
Thank you. We started in 1971 and
are turning 40. You’ve earned this
badge and a chance to win a $40
Starbucks card. Sweepstakes ends
3/12/11. For complete details:
http://sbux.co/TributeBadgeRules
Celebrate Starbucks’ 40th birthday
with a foursquare badge

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8
e-Giftcard from Starbucks
Personalized e-Giftcard with a
message from the sender
Choose any
amount
Social sharing
Choose a different design for the
e-Giftcard
Set a delivery date
Email or print

9. © 2012 Karthik Ethirajan, all rights reserved
9
Key Takeaways
User adoption of eGift Cards is accelerating
 Online shoppers spend more on eGift Cards than traditional cards
 Ability to personalize coupled with ease of use drives consumer adoption
eGift Cards are fast becoming part of retailer’s cross-channel
strategy
 Cost savings from issuing electronic gift cards versus physical cards
 Viral marketing potential from consumers sharing eGift Cards on social networks
 Ability to design creative and spontaneous promotional campaigns targeting
specific customer segments
Evolution of ecosystem supporting eGift Cards
 Proliferation of Smartphones and Apps has made mobile delivery a reality
 Barcode scanners at POS terminals has kept redemption process electronic
 Availability of SaaS vendors like CardStar to meet the technological complexities
of building out eGift Cards infrastructure
New Market Trends
 Delivering and sharing of eGift Cards on social networks
 Integration with m-Wallet and rewards program
 eGift Cards for buying digital and virtual goods