Feature: Vouchers & gift cards: Motivating by email

Voucher and gift cards are being joined by e-vouchers as an incentive product, reports Andrew Johnson, director-general of The Va, the trade body for vouchers, gift cards and stored-value solutions

Sales data from The Va for the first quarter of 2008, compiled by Information Resource Inc, provides relatively happy news for the voucher and gift card industry given that, despite a general downturn in the economy, sales for the market are up compared to the first quarter of 2007. This news is especially favourable during the post-Christmas period when sales are usually a little slow and should be very encouraging for businesses that use vouchers and gift cards as part of their sales promotions and incentive solutions.

The sales figures also revealed that the divide between paper and plastic remains fairly evenly spread, although paper vouchers have reduced their share of the market. But lest we forget, there is a third important category of voucher that contributes to the industry’s success and one that is expected to develop further – the e-voucher.

Visitors to this year’s Va Conference will remember an interesting discussion on the rise of e-vouchers and their potential for the future. The panel highlighted some of the benefits of e-vouchers such as the opportunities they offer for design using multimedia, the possibility of widespread international distribution, instant issue and redemption, the fact that they are environmentally friendly and the ability for issuers to track redemptions more effectively.

Many Va members are already using e-vouchers in their product range so I decided to find out a little more about what makes them so appealing.

Tim Bishop, head of gift certificates at Lastminute.com, says: “E-vouchers are proving popular with business customers, particularly as incentives, for use in reward programmes and as promotional or competition prizes. Customers especially like the ‘instant’ ability to distribute by email, and also the flexibility to wrap the e-voucher codes into their own or client-branded materials.”

With UK payments association Apacs reporting a 350 per cent increase in online transactions over a five-year period, online shopping is expected to continue to grow and, with it, many traditional high-street retailers are expanding their internet presence to accommodate for this demand. The e-voucher provides a natural accompaniment to such expansion.

HMV and Waterstone’s are among those to introduce new electronic voucher products to cater for this important market, recently launching Mobileshop as an e-voucher option on their reward platform. Katy Barton, head of corporate sales at HMV and Waterstone’s, commented: “Our e-vouchers are going from strength to strength now that hmvdigital is fully integrated on the platform. E-vouchers allow full visibility of redemption and consequent spend, giving us a very clear picture of our corporate customers. They can also be produced, personalised and delivered all in the same day so it’s easy to see why customers prefer them.”

Also entering the market, the Post Office launched its payout service in 2007. Gary Hockey-Morley, marketing director for the Post Office, says: “Using the latest barcode technology, e-vouchers allow marketers to distribute promotional incentives at a fraction of the cost of issuing cheques. Using Post Office payout means that promotions of all sizes can be completed in a cost-effective way, offering the customer a choice of payment channels and convenient method of redemption at thousands of local Post Office branches. An optional data-capture service is also available to allow companies to gather valuable market intelligence about customers’ preferences and purchasing habits.”

“Uniquely”, says Manoj Jadeja, national account manager, commercial, at John Lewis Direct, “the John Lewis Gift Voucher is redeemable multi-channel, both in-store and online. Recipients in the corporate market benefit from on-the-spot incentive rewards that can be redeemed instantly against the full range of John Lewis products, which even includes wine from Waitrose and groceries from Ocado.

“A major benefit for us as an online retailer is that our gift voucher allows you to dual-transact with the choice of other payment methods. We have also been able to track significant incremental spend of up to 60 per cent. It is important to offer as much choice and functionality as possible and a voucher that is redeemable both electronically and in our stores makes for a very appealing proposition.”

Consumers are undeniably embracing internet shopping at a growing rate and so the importance of developing reward programmes to utilise this platform is important. With the progressive thinking that is demonstrated by the development of e-vouchers, it is hoped that the voucher and gift card industry can continue to defy the downturn in the economy. A major aspect of this lies in continuing to offer value for money and added benefits, which are criteria that e-vouchers certainly fulfil.