How Restaurant Operators Can Optimize Their Technology to Tap Into the $698B Gift Card Industry
The global gift card industry is projected to reach a staggering $698.2 billion by 2024 and based on the National Retail Federation’s Annual Holiday Consumer survey, gift card spending is expected to reach $30 billion this holiday season alone. In fact, 58.8% of shoppers said they enjoy receiving gift cards and 73.4% of adults decided to purchase at least one prepaid gift card to holiday shop last year.
Every brand has the option to leverage gift cards to increase revenue and consumer engagement, but perhaps no industry is better primed to reap the benefits of an optimized branded currency program than the restaurant industry. Why? Because the foodservice industry has historically been the most lucrative for gift card sales, with over 30% of all general gift cards being redeemed at restaurants. With the advent of digital, reloadable gift cards, now is the ideal time for restaurant operators to stake their claim of the gift card marketplace.
What is branded currency technology and how does it serve up major revenue spikes for restaurants?
Branded currency encompasses coupons, loyalty programs, payment methods and gift cards. In terms of the latter, gift cards are now optimized to come in myriad forms—from plastic cards to apps or online caches accessible through desktop or mobile devices like smartphones and smartwatches.
This makes branded currency programs highly customizable, both in terms of format and funding—multiple “ways to wear” (or access) one’s gift card value and the option to reload gift card accounts fall right in line with contemporary consumer demand for adaptability. Furthermore, as society continues to move toward the widespread use of a ‘digital wallet,’ gift card optimization increases the likelihood that consumers will opt for gift cards over other payment methods. And that’s exactly what a restaurant operator wants: Market research indicates that consumers view gift card funds as a coupon rather than a budget, meaning diners tend to spend more. As a unique method of payment tailored to a business, branded currency creates a new customer engagement opportunity.
What is the link between consumer behavior and gift card technology?
MGM Cotai recently hosted an Oktoberfest event attended by over 127,000 international guests, wherein they implemented a gift card program as branded currency via wristbands. Guests could then pay by scanning their wristbands, significantly enhancing the customer experience by decreasing wait time and increasing time enjoying the fest. On the operational side, the reduction of barriers to payment and the consumer behavior associated with pre-loaded branded currency translated to exceptional sales and return business.
Both in terms of experiential marketing and in terms of a restaurant’s day-to-day, operators should utilize IT and security capabilities within their gift card technology in order to boost sales, create compelling customer experiences and minimize the chance of any data or security breaches.
Gift card technology therefore impacts the way consumers interact with a given brand as well as the ways restaurant and hospitality operators optimize their service offering. The result? Smoother and more engaging experiences for both parties.
What kind of security and IT support does my restaurant’s gift card program need?
The need for rigorous security around consumer data is at the front of the cultural conversation—and for good reason. Operators must ensure their gift card partner offers top-of-the-line security capabilities if they are to remain in play. Credit card fraud happens frequently, even in the gift card sales industry. Many brands are concerned that “bad actors” will use stolen credit card numbers to buy gift cards in order to access those funds. When the real owners of the credit cards initiate a charge-back, businesses—including restaurants—lose that money because the gift card has already been sent.
In addition to security, IT optimization is also key. Restaurant operators should leverage an integrated CRM to collect real-time customer data including spending patterns, which helps to build client personas, allowing restaurateurs to tailor their offerings to be more in line with consumer demand. This enables operators to properly curate menus and special offers, as well as to build brand loyalty.
Optimized CRM software also ensures gift card providers have servers up and available during peak transaction times like the holidays. Additionally, take care to integrate POS systems to enable a pain-free process for cashier sales and processing. To further enhance the customer experience, restaurant operators should make sure to use personalization capabilities to allow consumers to individualize their gift cards by giving them the ability to upload custom messages and artwork.
Ultimately, as technology and society continue to progress in the digital age, restaurant operators should invest in technology that puts their brand ahead of the competition. For those who stay ahead of the branded currency curve by tapping leading gift card technology, they not only keep their finger on the pulse—they keep it on a sizeable slice of a soon-to-be $698 billion pie.
About the Author
Graham Campbell, COO of Givex, a global cloud-based operations management solution designed to streamline business efficiencies and generate valuable and actionable customer data with offices in Canada, the United States, the United Kingdom, Australia, China, Brazil, Singapore and newly opened in Mexico City. Campbell is an innovative technology executive with over 13 years of experience in the payment, e-commerce and point of sale sectors. He started at Givex in March 2006 and since then has held positions including: VP of Projects & Implementations, VP and General Manager of Givex’s point-of-sale (POS), Senior VP of Product Development and now holds the position of the company’s Chief Operating Officer.