Who doesn’t like a gift card? (What makes it a welcome notion is right there in the name: “gift.”)
George Bousis sure knew that everybody liked them. In 2011, he and his business partner Bradley Wasz created CouponTrade, a savings website for discount gift cards, coupons and other deals. From that venture, two years later, was born Raise — a marketplace devoted exclusively to buying and selling gift cards.
The Raise platform (named for the notion that its users can “give themselves a raise”) expands upon the very concept of re-gifting, as shoppers can buy gifts cards for less than their total value, and sellers can turn unwanted gift cards into cash.
Raise Chief Innovation Officer Christopher Skinner says that the company is setting forth “a very simple way to change the rules” in the gift card space.
Retailers are used to buying media from publishers and agencies, but Skinner feels that Raise can disrupt that practice. For example, while Pinterest is in many ways a “great solution” (as Skinner describes it) for retail, it’s not cost per action (CPA)-driven, and therefore retailers cannot precisely track net new customers on the platform. They can do so, however, with Raise — which is both scalable and CPA-driven.
The experience of using Raise, Skinner explains, puts the customer in a different mindset than do traditional marketing methods that essentially tell him or her to make a purchase via intrusive popups and the like. To discover, as a customer, that you can buy, for example, $200 of Ann Taylor money for $150, “that changes the chemistry of the brain,” remarks Skinner. “You feel like you won something.”
What allows Raise to operate differently in the space is that it’s not just a media model — nor is it just a social model. As a payments model with the ability to tailor incentives, “it balances what the consumer needs [with] what the retailer needs,” says Skinner.
“It’s looking at it from a customer centricity,” he continues, “where the customer is the customer — but the customer’s also the retailer. The retailer doesn’t want to buy media; they just want customers.”
To combine media and incentive, Raise utilizes technology to perform what Skinner refers to as “one-to-one media,” a means of personalization that takes into account both the individual customer’s preferences and the timing with which an offer might be presented.
Skinner points to Groupon as a prime example of the problems that can arise from a lack of personalization, such as the case for the London cupcake shop that nearly went bankrupt as a result of a promotion on the site.
That particular offer, observes Skinner, “was good for the consumer, but it didn’t balance the equation … for the retailer.”
The technology that Raise is inventing is specifically designed to do just that and prevent problems on both sides of the transaction.
Given that he is the very person in charge of innovation at a company that has positively disrupted the gift card space, it may be surprising to hear Skinner share his view that the industry has “lost its way.”
Don Kingsborough’s “big idea” as the CEO of Blackhawk Network, as Skinner explains, was to use gift cards as a means of creating net new customers for retailers. Somebody’s aunt would be shopping in the grocery store, see a Sears gift card for sale and buy it for her nephew. That nephew might never have shopped at Sears, but now, with a $20 gift card in hand, he’d likely be compelled to do that.
The system that Blackhawk put in place has been muddied, though, according to Skinner, by the practice of retailers simply giving away gift cards — rather than selling them for others to give — just “to make targets, to make volume.”
However, Skinner believes that the original goal of the gift card can still be fulfilled — and that can be done through further innovation in the space.
By combing mobile app technology with “a lot of big data” and utilizing the one-to-one method of engaging customers, “we can fulfill the original mission,” he says.
That’s what Raise is focused on moving forward — along with building fraud prevention technology, as that has become a growing concern in the gift card space.
With fraud coming more and more online as chip and PIN are utilized at retail stores, the company is looking to build predictive analytics technology that can mitigate fraud for the retailer.
Without going into too much detail, Skinner remarks: “We think we have it.”
While Raise remains for the time being a gift card marketplace, Skinner outlines the future role of the company as giving value to consumers, allowing them to “do a lot more,” while also helping retailers acquire new customers in way that is “disruptive to how they currently look at media-only solutions or the complexity of ad tech.”
Should that strategy bear fruit, gift cards might keep on giving for some time.