Tuesday, January 4, 2011

The gift card challenge for financial services

Want a measure of brand performance? Consider counting the total redemption value of gift cards you sell at Christmas.

Based on a quick, but not necessarily representative, sampling of my family, Apple's iTunes cards streaked ahead of Osmosis cards (an Aussie retail chain specialising in cool surf attire) by some margin as the most popular brand among Gen Zs this Christmas.

Ask any tween or teen what they'd like for Christmas or a birthday and its a gift card for a favourite store or service. You see, gift cards are a form of empowerment for tweens and teens - a form of income that allows them to enjoy the shopping experience and buy things that they know their parents would never buy for them.

For the grandparents in our family, the gift card thing is just a reflection of laziness - a simple solution to the long tradition of hours spent trundling around stores carefully selecting presents that the recipient can return later, or begrudgingly wear or display (take your pick) whenever they drop around. They regard gift cards as soft option akin to just giving money when imagination fails.

But the kids think differently. My daughter fought long and hard going to a friend's birthday party recently that taking a present was something of an embarassment when she knew her friend would prefer a gift card. "I'll be the only one taking a present. How embarassing is that?" she argued.

With this passionate advocacy for gift cards, there's no doubt financial services companies will have to find a way to tap into the gift card phenomenon. Do you reckon a gift carded voluntary contribution into a superannuation account would be a red hot go?  Perhaps a $100 gift card to be spent with a financial adviser. Perhaps a $500 card to be used in home loan establishment?

Imagine the joy on a baby boomer's face at opening up one of these cards, beautfully packaged in a short-form Product Disclosure Statement with a pre-filled Application Form. It would create one of those priceless, unforgettable Christmas moments.

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