Customers don’t need reasons to shop. They need excuses.
Shopping is a habit, as basic as the need to bathe. But offer your customers cold shower, and they will stay away from the water, forever. On the other hand, hit them with vapours of personalized promotions and they will flock your store. Because customers don’t need reasons to shop. They need excuses. To indulge. The utilitarian view of shopping does not take this into consideration, which only undermines the systems of antiquity serving this retail-view. The whole model is hell-bent on finding why customers buy what they buy, without realizing that customers have an inbuilt exception mechanism governing their shopping behaviour. Customers buy and then develop the reason. Customers buy if they like something. This is not a rocket science; but the paleo-retail systems slumbering at the point of sale terminals, are designed to consider this ‘something’ as a product or a category. It is no wonder that retail stores housing these systems turn into relics, soon. Good products are just hygiene factors; meaning, while a bad product will put off a customer, a good one need not result in a sale. For us at Qwikcilver, that ‘something’ is promotions. A well-designed promotions program brings together the what (products) and why (offers). And gift cards are at the heart of it. They connect gifting with buying. Customers buy them to not only gift others but also leverage on offers for themselves. This allows customers to explore brands outside their preferred ‘shopping range’. As a result, many retail brands are increasingly looking at gifting as a strategic option to drive their premium table up. And there is a hidden benefit to gift cards. They are excellent refund and buyback tools. It makes prudent business sense to address customer refunds in the form of ‘preloaded’ gift cards.
There are multiple advantages to this method. 1. It enables the retailer to win back the confidence of unhappy customers. 2. It also provides the retailer an oppurtunity to upsell. It is a well-known retail fact that customers who purchase through gift cards tend to buy more than the preloaded value of the card. It is sufficing to say that gifting is the new buying, and gift cards the new growth drivers in retail.