As we come to the end of the year, I would like to propose a toast to all of the potential customers out there -- and most specifically, the ones who will realize shortly that they forgot to buy a gift for someone important on their list.
It might be a relative or a friend that they overlooked; it might be a business colleague.
It might be someone from whom they've received a thoughtful token, only to be a bit embarrassed by the realization that they don't have anything to give in return.
For a business owner, these people are a tremendous opportunity. And there's a simple way to give them what they need -- in a way that's almost "found money" for your business.
Ladies and gentlemen: I give you the digital gift card.
Maybe you're already doing this; if so, fantastic. (Although, have you marketed your gift cards enough to potential last-minute shoppers?)
However, in case you hesitate, or if you wonder whether this is really something your business should be doing, let's take a walk through the stats:
- First off, gift cards are America's number one most popular holiday gift; in 2019, consumers bought $98 billion worth of gift cards. There's also the issue of "breakage," meaning gift cards that are sold but never actually redeemed.
- Second, for last-minute shoppers especially, gift cards (and specifically digital gift cards) are often the only remaining option. If someone is looking for Christmas gifts on December 23 or 24, for example, obviously availability and shipping times are likely to be an insurmountable obstacle.
- Third, and perhaps most paradoxical, the most popular gift cards are for enormous brands -- which opens up a big opportunity for your smaller business.
Here's what I mean. WalletHub recently ranked the "best gift cards for 2021." It's an interesting list, but it might not surprise you to see that big brands like Starbucks, Target, Nike, Chick-fil-A, and iTunes are at the top of their most-recommended cards.
(The most popular gift cards, according to WalletHub: Amazon, Visa, and Walmart.)
Now, I like a nice Amazon gift card as much as the next guy; given that I am a sentient human being in the 21st century, I spend a bit of money there now and again.
However, as useful as a gift card like that might be, it doesn't exactly scream "thoughtful gift that I chose specifically for you."
So, for a smaller business -- really, in any industry -- there's an opportunity to really stand out.
Here's an example. Peter Reynolds is the art director of CanvasArt.com, which takes family photos and turns them into a painting on canvas. In 2021, the company did $873,000 in revenue, he told me, of which $268,000 came in gift cards.
"Almost a third!" he said. "Can't say enough about gift cards. They've worked particularly well for us."
Another example: Sol Dias, out of Texas, which specializes in "premium Mexican ice cream," according to founder Victor Garcia, and who said that about $50,000 out of his company's $625,000 of revenue this year came from gift cards.
"Digital gift cards helped us get through the tough parts of the pandemic," Garcia told me. "Customers bought them when cash flow was terrible and used them later down the line or gifted them to friends. Without them, not sure if we'd be open right now."
One last point: If you're not offering this kind of opportunity yet, there might be a temptation to think of this as something to take care of next year -- for holiday shopping in the fourth quarter of 2022.
But while that time of year might be the biggest cyclical opportunity, it's not the only one.
Mark your calendars now for other gift-giving dates in 2022, like Mother's Day (May 8), Father's Day (June 19), and for that matter the entire wedding, graduation, and other gift-giving seasons.
Then, enjoy being prepared to go out and find all the last-minute customers you might otherwise have missed.