As appeared in e27 Dheeraj Chowdhry, Chief Business Officer, South East Asia. Pine Labs, shared his thoughts on how businesses are scaling up efficiently using gift vouchers. With each gift voucher, our merchant partners instantly acquire two customers, the purchaser and the recipient
Modern history’s greatest health crisis, COVID-19, has had a significant impact on Singapore’s retail industry. Retail and F&B sales in Singapore fell by about SG$4 billion (US$2.95 billion) in total during the Circuit Breaker (CB) period, which was around 40 per cent of the 2020 full-year decline in the total retail and F&B sales of SG$10 billion (US$7.38 billion), as per government statistics.
Truth be told, no business can prepare for such a black swan event that caught the world completely off guard. Retailers in Singapore were no different and were struggling with dwindling cash reserves, supply challenges and demand fluctuations during the onset of the COVID-19 pandemic.
Fast forward to today, and the situation on-ground has relatively improved. Total retail sales in Singapore were up 11.2 per cent YoY in September 2022.
From Pine Labs’ extensive experience with the merchant commerce ecosystem, I can tell you our retail partners were quite innovative in navigating the challenges around COVID-19.
During the pandemic, social gifting increased and was propelled by a surge in gift cards usage at online marketplaces like Amazon and Lazada. This was understandable as there are many benefits of gift vouchers for businesses, small or large.
Let me cut to the chase and outline a few of what we have picked from our retail partners.
Gift vouchers reduce customer acquisition costs
Remember, with each gift voucher, our merchant partners instantly acquire two customers, the purchaser and the recipient. Considering today’s high customer acquisition costs, this works beautifully, especially for smaller businesses looking to focus on their core competency instead of spending big on marketing to win customers.
Our merchant partners also report an uptick in revenues as the gift voucher recipients tend to spend on an average 20-30 per cent more than the value of the gift card.
Foster customer loyalty
Benefits of gift vouchers cut across diverse industry verticals, including travel, hospitality, and restaurant industries which were primarily struggling with consistent cash flows during the initial months of the COVID-19 pandemic.
This made a lot of sense as businesses that were closed during the CB got the opportunity to infuse cash flow in their businesses by reaching out to existing customers and selling gift vouchers.
Reward and recognition
Employee reward and recognition is one area where we are seeing massive adoption of gift vouchers. Gone are the days when gifts were purchased and imposed on the recipients, and there was no way to find out whether those would be well received or not.
Today’s young Gen Zers want to be in control of the process, and therefore gifting the power of choice to them makes much more sense. True to this, we have seen several of our corporate customers rely on gift vouchers for their reward and recognition programme.
We found that employee rewards, channel incentives, and promotions & campaigns were the most popular use cases for gift cards and vouchers.
Improves brand recall
In addition to gift vouchers appealing to their present set of customers, they also help a business reach out to an untapped set of users cost-effectively. Generation of happy pleasant memories associated with gifting aids in a stronger brand recall.
Advancing the cashless vision
Did you know that three in five Singapore consumers have tried going fully cashless during the pandemic, with Gen Z constituting a majority of this digital-savvy segment, as per Visa’s ‘Consumer Payment Attitudes’ study?
Closing thoughts
Gifting, be it at an individual level or corporate gifting, is here to stay. After all, experts have alluded to the fact that gifting has measurable social and neurological benefits.
According to Dr Mark Williams, professor of cognitive neuroscience at Macquarie University, we get a release of dopamine when giving and receiving gifts, which means gift-giving creates pleasure, and a good gift can reinforce a positive impression of the giver, creating a stronger bond in the long run.At Pine Labs, we are proud to play our part in enabling a cashless and completely digital ecosystem for our merchant partners and their customers in Singapore. We have always been a tech-first company, and our cloud-based SaaS Gift Card platform is helping SMBs launch their gift card programmes effortlessly in any digital avatar, be it barcode, URL-based, or even QR codes.We empower our merchant partners by letting them place their gift cards into Bank catalogues, loyalty programmes, and wallet providers through APIs, thereby helping them expand their reach and avail associated benefits.Our customer base for digital gift vouchers is fast expanding to newer industry verticals, and the addition of insurance giant Singlife this month is a good example of the fast-paced adoption of gift vouchers by businesses across sectors.