The gift card industry is a $127 billion market, and 2016 has seen a 22% year-over-year increase in the number of people who bought gift cards on a digital platform, according to gift card exchange firm Card Cash.
But will last-minute shoppers turn to social gifting—in essence, buying a credit and sending it through social media as a surprise virtual present—to get it done in time? And if they do, will they purchase from restaurants?
It may be too late for restaurans to cash in on the year-end shopping sprees, but occasions like graduation and mother's day are not far down the road. Here are a few points to consider when deciding whether or not to offer gift cards or other items through social media.
Social media gifting can provide a marketing opportunity
Uriah Blum, vice president of operations at the health-focused fast-casual Vitality Bowls, says his company employs the same digital service used to sell gift cards through social media that it uses to offer prizes for contests. One example is the brand’s #BeyondtheBowl summer contest in which followers were asked to share a picture of their Vitality Bowls meal online for a chance to win a $100 gift card.
But is it profitable?
Erik Thoresen, principal at Technomic, is unsure about the impact social media gifting has had on e-commerce. “I don’t believe we’ve seen a lot of reporting attributing a great amount of sales from social media,” he says.
What interests Thoresen is social media’s ability to affect consumers’ purchasing decisions on other digital platforms. “A lot of times consumers will shop around and make sure that they get the best price. They might see a product on social media and then go to another site and look it up there,” he says.
It’s all about demand
While acknowledging that gifting via social media has evolved over time, Thoresen notes that consumers are more used to buying from online retailers. “Consumers buying from social media either had to wait for a physical gift card or paste the code into an email before, which is not the same thing as sharing a product on a social media site today. That’s an enhancement, for sure. The question is, is that enough of an enhancement to get people to change their behavior?”