The gift card industry’s continuing growth is highlighted by an announcement from British retailer Marks & Spencer (M&S) that its gift card revenue has grown a whopping 245% in the past year. One of the keys to that record was its partnership with Runa, a digital value payments infrastructure and network.
Prior to working with Runa, M&S didn’t just lack the infrastructure to properly process gift card payments, but also didn’t have sufficient means to distribute them to customers. The retailer previously had difficulty in selling and delivering digital gift cards to business buyers without a platform in place to support it. Runa was able to help M&S streamline its ordering process, which allowed the retailer to build out a new customer base with B2B sales.
Marks & Spencer operates more than 950 stores across the United Kingdom and hundreds more in 29 additional countries. “Since signing up with Runa, we’ve been able to reach new customers and make it easier than ever for them to order from us,” said William Wilford, B2B Customer Success Manager at Marks & Spencer in a prepared statement.
Distribution Is Key
The distribution network is an easily overlooked part of the gift card process. “Retailers want to quickly increase their gift card distribution options,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “The utilization of digital delivery eases the entry points into commercial B2B sales and adds a variety of new distribution points through bulk sales, incentive programs and other related one-buyer-to-multiple-recipient options.”
Gift cards have reached a saturation point where 43% of this year’s holiday spending is expected to be through that vehicle, according to a recent PaymentsJournal podcast. Retailers that lack a solid infrastructure for distributing and processing gift cards will be left behind.
“With reduced sales friction, retailers can multiply the gift card benefits that Javelin’s research has identified, including card users spending more than the value of cards, purchasing more expensive items than planned, and increasing in-store visits,” Hirschfield said.
Javelin’s own research has found that 40% of consumers will generally spend more than they typically would when using a gift card, and 25% will generally purchase a more expensive item that they normally purchase.
