The blog post written over Reading week for a marketing blog (It's also PR Story #6):
In the past five years gift card and voucher sales have gone
up year on year and currently the sector is estimated to be worth approximately
£4.65 billion in the UK. Despite the healthy growth so far, has the flurry of
brands that have gone into administration last month dented the future
reputation of gift vouchers altogether?
Since the announcement of HMV, Jessops, Blockbuster and
Comet going into administration, seemingly all at once, there has been
increased coverage over the issue of redeeming gift vouchers with these brands.
There is a risk the entire gift voucher sector will be affected by
administrator’s decisions to refuse the sale or redemption of gift cards of
businesses going under.
Due to these decisions consumers have been outraged that
they cannot use their gift cards or vouchers anymore, even though some stores
are still trading, as in the case of HMV. This threatens to bring down other
brands (that are stable) gift card sales because consumers are now less likely
to trust the schemes. Since the high street now feels like a game of ‘which
brand will go under next’, consumer confidence in gift cards is at an all time
low, but does that mean marketers for retailers should scrap the schemes from
their strategy plans completely?
The answer is no! There are many ways around this crisis and
marketers should be careful to ensure they don’t fall into the trap of
promising customers a service and then not being able to deliver. One way to
overcome this is to invest in becoming a part of a multi-retailer gift card,
such as the Post Office’s One4All card, that can be spent at over 17,000
stores. Although this doesn’t guarantee a sale for a particular brand, it’s
important to remember in the long run, consumer confidence needs to be high in
order for the high street to have a chance at surviving as a whole.
Another way to avoid this issue is for brands to choose
partnerships with other companies very carefully. For example, if gift cards
are a part of a reward scheme such as O2 customer rewards (i.e.: save up £10
and convert it into a money off voucher), brands need to ensure that the
company they’re trusting to provide a service can deliver also, as both brand’s
reputations are on the line. Alternatively partnerships can be avoided
altogether during these tough times and rewards can come directly from the
company itself to ensure customer satisfaction and to enhance the relationship between
retailer and consumer.
Whilst Jessop’s customers lost over £800,000 collectively
through unredeemed gift cards, HMV and Blockbuster’s administrators lifted the
decision to ban gift cards as a goodwill gesture. However, should the brands
come out of administration again it would be fair to assume that consumers are
unlikely to invest in their cards again, in case of a repeated incident.
Although officials are hoping this crisis is ‘small blip’
that will pass, advice given to consumers is to invest in a multi-retailer gift
card for the future and spend all gift cards they have sooner rather than later
to avoid disappointment. Until brands can prove themselves to be trust worthy
and be seen to fulfil their promises we can expect consumer purse strings to be
drawn very tightly in the coming months. Brand trust and reputation is very
easy to damage and hard to build back up; companies must remember that a well
reputed brand is a brand worth saving and standards shouldn’t be forgotten at
the first sign of financial trouble.
No comments:
Post a Comment