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Key Takeaway: By adopting a mobile-first approach to gift cards, restaurant operators improve the guest experience, boost sales, and position themselves for future growth. While physical gift cards currently outpace digital gift cards by a two-to-one margin across generations, the digital segment represents a significant and valuable portion of gift card sales:
People across generations buy twice as many physical gift cards as digital ones,
according to Bank of America research.
According to research conducted by Bank of America, digital gift cards tend to carry a higher monetary value than their plastic counterparts. In 2023, the average digital gift card was loaded with $83.95, compared to $63.86 for physical cards. So, despite a 50% differential in the number of cards sold, the monetary gap is only 34%:
According to Bank of America, digital gift cards hold more value than physical gift cards, except those given to a significant other.
As younger generations gain more purchasing power and as smartphone technologies like mobile wallets proliferate, we can expect digital gift cards to experience rapid growth in coming years. We assert that restaurant operators who prioritize mobile-first gift card solutions will be in a better position to capture future growth.
In this article, we’ll explore why a mobile-first approach to digital gift cards is becoming increasingly important for restaurants, and how this strategy benefits your business in the short and long term.
1. Customer experience enhancement: The power of mobile-optimized gift cards
Customers expect seamless mobile experiences from the businesses they patronize, including restaurants. For restaurants, this means a well-optimized mobile gift card system is essential for customer retention and sales growth.
By optimizing gift card systems for mobile devices, you ensure your offerings are conveniently accessible to the widest possible audience, aligning with the on-the-go lifestyle of modern consumers. Digital gift cards provide a seamless experience from purchase to redemption while people are on the go, eliminating the friction often associated with physical cards.
Mobile gift cards can easily integrate with your restaurant’s existing app, loyalty program, and online ordering system. This cohesion creates a unified digital ecosystem that deepens the guest experience and keeps your establishment at their fingertips.
2. Capturing impulse purchases: How mobile gift cards drive sales
One of the key advantages of mobile-optimized gift cards is their ability to capture impulse purchases. According to Blackhawk Network, last-minute buyers tend to be young: 40% of gift card purchases by GenZers are unplanned, compared to only 19% for Boomers.
Source: Blackhawk Network: 2024 Could be a Shockingly Normal Year for Gift Cards
Ease of access taps into the spontaneous nature of gift-giving, allowing your restaurant to take advantage of "spur-of-the-moment" decisions. For instance, a guest might remember a friend’s birthday while scrolling through social media. With a mobile-first gift card system they can quickly purchase a gift card from you with their phone and send it along, turning a potential missed opportunity into a sale.
Timely offers and convenient mobile gift cards drive immediate and significant sales and visits. For example: A customer receives a promotional email offering a $20 bonus card for every $100 gift card purchased. Later, while driving home hungry, they spot your restaurant and quickly take advantage of your offer via mobile and stop in for a meal, seamlessly redeeming their new gift card.
3. The reload revolution: Leveraging ease of use
Mobile gift cards offer an additional advantage for regular customers: the convenience of easy maintenance and continued use through simple balance reloading. This feature encourages repeat visits and fosters customer loyalty.
A trend we’re seeing among major coffee chains, like Peet’s Coffee and Starbucks and quick-service restaurant (QSR) concepts, like Jimmy John’s, is the implementation of gift card balance reloading. This innovative approach not only ensures that guests always have funds available for their next visit but also provides restaurants with a steady influx of prepaid sales.
4. Digital wallet integration: Increasing visibility and usage
Mobile gift cards seamlessly merge with popular digital wallets like Apple Pay and Google Pay, allowing guests to easily store and access their gift cards for online orders and in-store purchases via NFC or QR code scans.
Adding gift cards to digital wallets offers several advantages that benefit you and your guests:
- Increased visibility: Gift cards appear alongside other payment methods, serving as a constant reminder to users.
- Convenience: Customers can easily use their gift cards without the need to carry or remember physical cards.
- Security: Digital wallets offer advanced security features, instilling more confidence in gift card usage.
By embracing digital wallet integration, you can ensure that your gift cards remain top-of-mind and readily accessible to your guests.
5. Targeted marketing: Unlocking new promotional opportunities
Mobile gift cards create fresh avenues for precision marketing. Push notifications can alert guests about their gift card balances or highlight special promotions, encouraging card usage. Location-based services can send timely reminders when guests with active gift card balances are near one of your restaurants.
Digital gift cards also provide a unique opportunity to convert recipients into loyal customers. Unlike physical gift cards, digital versions provide valuable customer data, including email addresses, which can be used for targeted marketing campaigns.
The key is inviting digital gift recipients to opt-in for communication by registering for an account to manage their gift or join your loyalty program. For example, when a gift card is redeemed for the first time, you can offer an incentive to join your loyalty program: “Enjoyed your gift? Join our loyalty program now and get 10% off your next visit!”
This strategy leverages the positive experience of receiving a gift to build a longer-term relationship with the customer. These guest acquisition strategies enable more personalized, timely interactions with guests, potentially boosting gift card usage and overall brand engagement.
6. Data-driven insights: Leveraging gift card information for growth
A mobile-first approach to gift cards equips you with valuable data on customer behaviors and preferences. You can use this rich information to create personalized promotions, fine-tune your loyalty program, and guide strategic business decisions.
For example, analyzing gift card purchase and redemption patterns can reveal popular gifting occasions, informing targeted marketing campaigns to individual guests. Additionally, insights into customer spending habits with gift cards can help you optimize menu offerings and pricing strategies.
7. Streamlining operations: Reducing costs with digital solutions
Digital gift cards also eliminate expenses associated with physical card production and distribution. The automated nature of digital products minimizes staff time devoted to gift card management, freeing your team to allocate more attention to core restaurant operations. This increased efficiency drives meaningful cost savings and simplified spend visibility.
8. Eco-conscious gifting: Satisfying the demand for sustainable options
As environmental awareness grows, mobile gift cards offer a sustainable alternative to plastic. By reducing plastic use, you appeal to the 56% of eco-minded restaurant consumers who prefer establishments that don’t leverage single-use plastic and demonstrate a commitment to sustainability.
This alignment with consumer values improves your brand perception and loyalty, particularly among younger demographics who prioritize environmentally responsible businesses. According to Blue Yonder’s third annual Consumer Sustainability Survey, 85% of Gen Z and 84% of Millennials say sustainability considerations are important to them. By adopting mobile gift card solutions, you position your organization as a forward-thinking, eco-conscious establishment.
Seizing the digital advantage: Why now is the time to act
In today's digital-first world, a mobile-optimized approach to gift cards boosts your restaurant’s bottom line. By prioritizing mobile solutions you elevate your customer experience, increase sales, streamline operations, and position yourself for future growth.
To discover how Paytronix can help you seamlessly integrate gift cards, loyalty, and online ordering with your restaurant’s mobile app, contact us today for a personalized demo.
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