Sephora is experiencing a digital gifting revenue growth rate that is eight times faster after its integration with prepaid commerce solution CashStar Commerce, proving that offering the capability on standalone mobile applications can ramp up gift card sales.

The makeup retailer has been able to augment its omnichannel efforts as well as its prepaid commerce program. By partnering up with CashStar, the brand is now able to allow customers to instantly purchase and send personalized digital gift cards from any smartphone, tablet or desktop.

“As consumers become more mobile, it makes sense to put digital gifts at their fingertips across their mobile devices,” said Gary Lombardo, vice president of marketing at CashStar, Portland, ME. “Mobile is key in driving consistency in Sephora’s gifting experience, in both the experience of purchasing the gift card, but also the receiving and redemption of gift cards.

“Sephora’s mobile-first strategy proved successful when they participated in Apple’s Passbook launch in 2012, which allowed for redemption in-store at POS. This led to an expansion to include Web-based digital gifting on the CashStar platform, as well as an integration into Sephora’s standalone mobile app,” he said.

“Since Sephora’s shoppers are digital, researching and purchasing products on mobile, it seemed like a natural progression to offer digital gifts on this platform as well.”

In-app gifting
Sephora selected to incorporating digital gifting capabilities into its Sephora-to-Go mobile app so that customers could have a convenient location for storing gift cards in, similar to Apple’s Passbook. This way, consumers do not need to worry about misplacing their physical cards, losing them in their email inboxes or being unable to deduce the remaining balance.

In turn, Sephora expects this will help boost mcommerce, as makeup fans can purchase items directly within the app.

The brand has also experienced a 51 percent redemption rate from consumers within the first month of activation, and an initial purchase value 30 percent higher compared to plastic gift cards, proving that mobile offers a layer of much-needed convenience to on-the-go consumers.

PayPal is another major brand that has integrated with CashStar’s platform (see story).

“Many of our CashStar customers, including Sephora, have strong mobile components as part of their digital gifting strategies,” Mr. Lombardo said. “Not only are the digital gift cards CashStar powers redeemable on mobile devices, but they can also utilized via mobile wallets through our partners such as Apple Passbook and Google Wallets.

“Overall, about 41 percent of gift cards were opened on mobile devices in 2014. We’ve seen this number dramatically increase year-over-year and expect that trend to continue.”

Personalization aspect
The lure of CashStar’s platform is two-fold: brands such as Sephora may integrate gifting solutions more easily with their mobile apps, as well as offer personalization options that resonate extremely well with consumers.

Makeup fans can customize their Sephora mGift cards with personal photos and videos. They also have the ability to choose a Beauty Studio Services gift card, which includes a 45-minute in-store makeover in addition to the monetary value of the gift.

Sephora has strategically marketed its digital gift offerings in conjunction with in-store services, so that it may drive sales in bricks-and-mortar locations as well.

The retailer has been placing a significant focus on mobile as of late, and plans to tap beacon technology in-store as well as an augmented reality mobile app (see story).

“Personalization can serve as a key differentiator when it comes to digital gifting,” Mr. Lombardo said. “Not only does the Sephora eGifts program allows consumers to upload photos and videos with their digital gift cards, but they also have the added value of a 45-minute in-store client makeover in addition to the face value of the card.

“These perks help consumers engage with the Sephora brand and establish a personal connection while building brand loyalty.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York