Is it time for digital rewards?

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What marketers need to know about emerging trends

Shoppers today are more savvy than ever before. They’re connected 24/7 via mobile devices, aren’t afraid to compare and command the lowest prices, and have come to expect rewards for their purchases. In an effort to attract and retain loyal customers and engage shoppers in ways that make sense for their instant-gratification, on-the-go lifestyles, retail marketers are leveraging digital rewards.

There are several types of digital rewards—a broad, umbrella term describing things like egifts, virtual rewards, online and mobile-friendly rebates, and other incentives. Consumer preferences for certain types of digital rewards are emerging, and shoppers are becoming increasingly confident about finding and using them.

There are a few up-and-coming trends in digital rewards that complement today’s shoppers’ purchasing habits that marketers should consider:


Consumers’ adoption of egifts has risen in the past few years. A study[1] by Mercator Advisory Group found that in 2011, the retailers surveyed said that, on average, about two percent of the dollars loaded onto gift cards went onto egifts. By 2015, it was nearly ten times that amount.

Versatile and convenient, egifts are essentially digital versions of physical gift cards that are delivered to consumers via email or text. Shoppers live omnichannel lifestyles that allow them to shop online via mobile device and in-app, in addition to in-store. They hunt for deals and rewards, and they want to receive them quickly. As shoppers have become savvier about the purchase process, retailers have had to make their rewards more valuable, more intuitive and easier to redeem. eGifts fit the bill.

For instance, retailers that used to rely on mailing paper check rewards to shoppers can now deliver egifts via email. Retail marketers can also gain more insights into the success of their rewards program by using egifts, as they can track when the egift is received, opened and activated.

People love the instantaneous, digital nature of egifts, which can be redeemed online, in person or on mobile devices. As technology continues to elevate the shopping experience, and applications for using them along the path to purchase are proliferating quickly, egifts have become a preferred reward option.

Virtual rewards

Different from an egift, virtual rewards can only be spent online—unlike an egift, which can be redeemed in a variety of ways.

Though in the past, online-only rewards may have felt limiting, a 2016 Forrester report2 found 244 million consumers browsed or bought online in 2015 and predicted that the numbers will rise. Therefore, these rewards, which can be spent in many places where credit cards are accepted, now make great sense. Consumers delight in receiving virtual rewards online, and spending them there as well.

Mobile wallets

Marketers have been discussing mobile wallets for years. After an initially slow start, they’re finally gaining some traction. Credit and debit cards have led the charge in penetrating mobile wallet integration, but prepaid isn’t far behind and can now integrate into several wallets, thanks to advancing tokenization technology.

As prepaid payments become compatible with mobile wallets, so do prepaid incentives like egifts and virtual rewards. This cutting-edge compatibility provides shoppers with even greater reward flexibility.

Is it time to laud digital rewards?

Absolutely. With the precipitous acceptance of egifts and omnichannel connectivity, consumers are incorporating groundbreaking technology into all facets of their lives. Digital rewards meet shoppers’ mandate for convenient incentives, and the best providers offer customers choice by giving them the reward they want, how they want it. Retailers also benefit from digital rewards thanks to streamlined processes that help track customer engagement and loyalty. Marketers that don’t consider digital rewards today risk falling behind with their digitally enabled customer.

Jennifer Worley is the Vice President of Product Rewards at Blackhawk Engagement Solutions.

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