QSR segment behind in digital gifting

Oct. 7, 2013 | by Alicia Kelso

A new report from RSR Research titled "Digital Gift Cards: The Good, The Bad, And The Ugly," highlights which retail brands are driving the digital gifting trend.

The research, sponsored by CashStar, also points out the benefits to having such an option for consumers, as well as what some companies are doing wrong in their approach to digital gifting. The survey results found that 69 of the 99 participating retailers now have a digital gift card line. This is up from 59 in 2011 and 40 in 2010. To outline the "good," the "bad," and the "ugly," the report focused criteria such as:

  • Gift cards are easy to find;
  • Cards have gift themes;
  • Choice of denominations;
  • Mobile optimization;
  • Ease of redemption; and
  • The ability to receive the card via social network

Top restaurant brands

In the best overall retail category, Starbucks and Dunkin' Donuts ranked No. 3 and No. 4, respectively. They followed The Home Depot and Sephora. The Cheesecake Factory came in at No. 5. The restaurant industry ranked second for the highest average score, with 40.1 points, behind the beauty category, which had 48 points and was driven solely by Sephora.

Dunkin's gift card program fits much of the examined criteria. The brand began offering customizable gift cards online in 2011, just in time for Father's Day. Now, Dunkin' Donuts includes a variety of card themes from which to choose. They can also be purchased in any amount between $2 and $200.

Additionally, last summer, Dunkin' unveiled its mobile application, which includes a payment and m-gifting platform.

"The retailers who helped recipients manage their cards the best offered to save the card to an account, and the best of the best, like Starbucks and Dunkin' Donuts, offer to save it to an account that can be accessed on a mobile phone — and used for payment," the report said.

Just 15 of the retailers offering e-gift card have mobile integration for redemption.

'The Good'

The report also ranked the positive attributes of having a digital gifting program. For example, the report says, e-cards are "significantly" easier to find than they were just two years ago. Many brands worked on this by moving the gift card option above the fold on their website.

Other benefits include:

  • Shipping is less of an issue, and buying on line exacerbates "tiny conveniences," the report says;
  • Mistakes are minimized because of confirmation requirements; and
  • More retailers are hiring third-party firms to improve the process.

'The Bad'

Some of the biggest digital gifting issues, according to the report, are:

  • Having a small font;
  • The inability to customize denominations;
  • Having too many clicks to get through before the gift card transaction is complete;
  • Having too much repetition (asking for a customer's email address numerous times, for example);
  • Not emphasizing speed of service enough;
  • Having too many mobile wrinkles to iron out; and
  • Having "strange social priorities." For the last example, Nike's Facebook page doesn't have a gift card button. The report says that gift cards are an "easy way to monetize social media," and the ability to buy a gift card on a fan site should therefore be a priority.

'The Ugly'

As for the "ugly," the report blasts the quick-service segment specifically, stating that brands in this category are decidedly absent from the "world of digital gift cards." This can be attributed to the franchising model used by most QSRs.

Also, the report states there is too much searching required, and too much confusion about gift card offers.

And, of the 69 retails who offer electronic gift offerings, "too many retailers" couldn't complete a transaction. Burger King was named an offender in the "Did Not Finish" category, which includes retailers whose buying process is broken. Still, Burger King, with 21 points, behind Starbucks' 48 and Dunkin' Donuts' 47, generated at least some points.

Baskin-Robbins, Krispy Kreme, McDonald's, Subway, Wendy's and Taco Bell eached scored 0 points in the research. Panera did as well, but the brand has since added an e-gifting platform.

The casual dining segment fared much better — with The Cheesecake Factory at No. 1 (46 points), followed by Applebee's (44), T.G.I. Friday's (42.5), Chili's Grill & Bar (41), Texas Roadhouse (40), Olive Garden (39), Red Lobster (38), Buffalo Wild Wings (36) and Ruby Tuesday (34).

Read more about digital initiatives.

Topics: Customer Service / Experience , Marketing / Branding / Promotion , Online / Mobile / Social

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
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