The panel (l-r)
Andrew Johnson, director general, UK Gift Card and Voucher Association
Joanne Taylor, corporate sales manager, Asda Business Rewards
Harriet Rhys-Williams, retail development consultant, Pizza Express
John Dove, business incentives manager, House of Fraser
Richard Wergan, marketing director, Barclaycard Global Business Solutions
Tracey Finn, head of corporate service, Harrods
Duncan Jennings, co-founder, VoucherCodes.co.uk
Rob Froome, head of business solutions, New Look
Marketing Week (MW): What are the positives and negatives of different employee reward types, such as gift cards and experiences?
Andrew Johnson (AJ): If an employee is just getting a discount voucher for all their hard work, that is not really very inspiring. Discounts might be part of an employee benefits package, but it is a complete cop out if firms reward their staff with discounts.
If a retailer wants to offer all employees in a company a discount, there needs to be a valid hook or reason to offer it. It needs to be something more exciting than just printing a coupon from a website. However, it is hard for retailers to offer specific discounts to specific employees because they will need to identify themselves. Using gift cards is easier.
Harriet Rhys-Williams (HRW): We have created new products for this market. Instead of loading a card with money, you load on the ability to have, for example, a two-course meal at Pizza Express with wine. The person receiving the gift does not know how much the company has spent and it feels more like a treat.
Richard Wergan (RW): Incentives linked to a shopper’s spending habits are based on actual knowledge and data, which can motivate and drive consumer behaviour. Retailers investing in the analysis of the data will reap the benefits in terms of customer retention and spend.
In August, Barclaycard Freedom teamed up with Vouchercloud, the mobile phone voucher service. It means our credit card customers can search for deals by location, using Vouchercloud’s GPS functionality.
Joanne Taylor (JT): Asda does not operate coupon-based discounts or have anything on voucher code sites because it has ’rollbacks’ on its general pricing. Everything else on top of that is a cost. Asda’s policy is to keep prices down as a rule, rather than as a one-off.
MW: Is it better for employee or customer rewards to offer a broad choice or to be specific and personalised?
JT: With the economic environment the way it is, I think giving people the choice is better because they might choose to treat themselves or they might choose to use their reward to enhance their shopping budget for the week.
It depends on the value of the reward. They could want to treat themselves to something or upgrade their Christmas shopping to a range higher up. Anything where you have got money off a specific range of goods is limiting and it is difficult to please everybody.
HRW: It needs to have national coverage. You need to have a broad spectrum from families to young people to old people. Pizza Express does all of those things. You also need an experience that feels like a reward and research shows that dining typically comes out top in the type of reward people would like. Having got those basic appeal elements in line, it is helpful to be able to tailor offers at different points.
John Dove (JD): In some circumstances, a gift card might be really appreciated but in others it might feel impersonal. You are aiming for something that feels like a gift and gives the recipient access to something they would value. However, you could give generic high street vouchers and they would end up going into the petrol tank or the weekly shop and the person receiving it does not end up with a treat.
RW: I think it is better to be personalised. Having one area to host the rewards is beneficial to both consumer and the retailer. We can offer our retail partners insight based on our knowledge of our customers. This enables us to provide tailored special offers that are as suited to a customer’s spending habits as possible. The retailer can also use this insight to further target existing and potential customers through its marketing strategy.
Tracy Finn (TF): We have noticed an increase in demand for the personalised gift card, in particular from businesses looking to reward, motivate and inspire. Harrods Corporate Service is regularly asked to tailor the gift card to a personal shopping experience. This may include a pampering session in the Urban Retreat spa followed by tea in the Georgian restaurant or a wine tasting masterclass.
MW: How can companies make sure their staff and customer rewards stand out from freely available deals on consumer websites?
Duncan Jennings (DJ): You rarely see employee benefit schemes that offer incentives that you cannot get through voucher code sites. This is also the case for vouchers offered when someone takes out a credit card and a whole range of other services. We try to ensure that our offers are clear and easy to understand. If an offer seems too good to be true, often it is, which is a real frustration for users.
Rob Froome (RF): Freely available discounts are just that freely available. So while they have appeal in the current economic environment, they are not offering a point of difference that is targeted at a specific audience. To stand out, companies need to personalise, add value and offer something different.
New Look offers a gift card that comes with a free music download. We also have a denim gift card and a denim pocket designed to hold a phone or an MP3 player that comes free with a gift card purchase.
JD: House of Fraser is a premium brand and is carefully positioned in the market, so the discount there is appreciated for that reason. Other retailers have almost got a permanent sale on. We are not in that place, and when we do partner with someone we also think about brand fit. We would be less likely to have our gift cards being offered as prizes in a bingo hall than in association with a premium hotel.
RW: One-off incentives work well. This could be something as simple as the introduction of a new product or service to a particular reward programme or the chance to earn double the reward for a limited amount of time. The key here is to make sure these are only offered from time to time, making it into a treat for consumers.
MW: How much demand is there for rewards that can be delivered by email or to a mobile handset?
AJ: It is a very hot topic in the industry at the moment. The main advantage is that it is instant, while from an employer’s perspective it cuts down on delivery costs.
DJ: Consumers are increasingly willing to replace cards and vouchers with an emailed code because it is efficient.
We are seeing huge growth in online discount vouchers to redeem in store. We launched an iPhone app a couple of weeks ago and in the first week we were the number one app in the UK across all categories. I’d like to think we did a good job with it, but a lot of that is just the demand from users for the vouchers. There is a huge trend in people who want to research online, but spend offline.
RF: New Look has just carried out some research with a customer panel on virtual vouchers and they felt most of the advantages were for the sender. Convenience and speed were felt to be compelling reasons to send a virtual voucher. A high number of respondents would consider sending them, although from a recipient’s point of view they thought they were more impersonal. Junk email filters and the need to print vouchers are cited as things that might put them off.
JD: To get your brand into somebody’s hand, physical vouchers are valuable, but House of Fraser is looking at using vouchers that can be emailed to the customer. That is appropriate in certain situations. In the rewards and incentives area, I would be happier for someone to receive a physical gift card. But evouchers come into their own if it is an employee benefits scheme because the recipient can log on during their lunchtime and go shopping that night.
TF: Although many gift cards are now redeemed online, we understand that our customers value the thrill of shopping in-store at Harrods. However, we have also seen an increase in the number of gift cards redeemed online, as it gives customers outside London the opportunity to make purchases.
We encourage consumers to register their gift card online so the balance is preserved should the card go missing
MW: What are the advantages of schemes where employees amass points to exchange for rewards, and where they can check their balances online?
AJ: They are generally used by very large companies. Each employee has an online account and is rewarded with points that can be converted either into merchandise or gift cards. It is a simple way of managing people’s performance, but if you are looking at peer recognition, giving trophy-type awards are really important because it is not just about knowing how wonderful you are at work by how many points are in your account, it is about the benefits of others knowing that and making you feel special for being rewarded as an individual.
If someone wants to work towards a bigger purchase, such as a foreign holiday, it works well to amass the points as opposed to the employer deciding to give out £50 of retail vouchers each month.
Points redemption for a range of products and gift cards is a good option because it gives the recipient a chance to pick their reward. However, the schemes are a little more expensive and complicated to administer. Asda has introduced a range of gift cards with set values, so you do not have to go online to check the balance. You have to cover all generations and people according to what their internet access may be.
HRW: We have used online voucher codes for a while, but have only just launched egifts a gift card with money or a meal at Pizza Express on it that is delivered electronically.
People do want instant gratification and it is nice to walk down the street, remember you have accumulated a load of points, download the voucher to your phone right there and go into one of our restaurants and eat.
MW: How do the different methods of delivering reward schemes ensure the security of reward accounts?
RF: There is no doubt that gift cards deliver security benefits. New Look has a web-based management system that puts companies in charge of their gift card programme. We can load gift card numbers and money onto the system. They can also take blank gift cards without the need to store them securely and just load value when they want to. We encourage consumers to register their gift card online so the balance is preserved should the card go missing.
TF: The main reason why gift vouchers are being phased out is security. If a paper voucher is lost or stolen, it is just like losing cash. However, we can freeze and unfreeze gift cards if they are reported stolen and transactions are fully traceable. Although the Harrods Gift Card expires after 24 months if it is not used, it can be easily renewed.
The next step for gifting will be reloadable cards, followed by gift card codes that can be emailed or texted and then redeemed in store or online. The technology is there; we just have to find the right balance between offering this technology in line with the Harrods product offering.
Reloadable cards would allow the recipient to hold onto one card and have it updated remotely, eliminating the need to deliver cards, which makes it safer. Mobile gift card codes would also mean that cardholders don’t have to worry about losing the physical card.