Case Study: Caribou Coffee Amps Up Holiday Sales With Mobile Gift Cards

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CCMerchant: Caribou Coffee
Location: Worldwide
Size: Almost 500 locations
Vendor: CashStar
Bottom Line: Mobile gift cards are helping Caribou Coffee deliver on its goal of providing customization and convenience to customers during the holiday shopping season.

In an effort to enhance Caribou Coffee’s mobile marketing capabilities, and spur a boost in gift card sales during the important holiday shopping season, Caribou launched an eGift card initiative in early November. Now, customers who purchase eGift cards online can send their gifts to friends via email. Recipients can then redeem their gifts by showing their smartphones to a cashier or printing the gift card at home and handing over a paper printout. “If it’s the last minute and [our customers] need to get someone a gift, they can just hop on their computer. They’re able to customize the gift card however they want and send it out,” says Michele Vig, Caribou’s vice president of marketing. “Customization and convenience were key on our list.”

Caribou’s new mobile gift card program is the result of a partnership with CashStar, a digital gifting vendor that has worked with Crate and Barrel, lululemon, and The Home Depot. “We did evaluate other partners, and as [we] evaluated it, [we] knew that CashStar has had a great performance in launching this smoothly,” Vig says. “Like many of their partners, we had no challenges and we just smoothly implemented it.”

In the first quarter of 2014, Vig will also launch the Caribou Perks Program. The new program will be the first digital loyalty initiative Caribou has undertaken. Customers who enroll receive messages and updates electronically via mobile and text, as well as by email. “For people who are loyal Caribou fans, they’re going to get rewarded for their purchases. That’s the biggest value,” Vig says. “If you’re a Caribou Coffee customer and you’ve been coming, then the more you come, the more you’ll be rewarded from us.”

Vig says the new loyalty program will not be integrated with mobile gift cards, however the two programs will “live side-by-side.” “All the purchases you make on your loyalty card will be counted toward your points. If you purchase an eGift, and if you have a loyalty card, then those purchases will count together,” Vig says. “But if you choose not to be a loyalty member, you can also just use eGift. You don’t have to be a loyalty member.”

Mobile gift cards and digital loyalty are two of the “most visible” digital initiatives Caribou has coming down the pipeline, however the company is continuing to look at new ways to integrate smaller hyperlocal programs and tools, as well. “Moving into the digital space at Caribou is a No. 1 priority,” says Vig. “We are just at the infant stage of making that happen and this is just one of many things to come from Caribou in the space of digital and mobile. We’re investigating a lot of different ways to engage our customers digitally throughout 2014.”

Vig anticipates a continued ramp up in interest in Caribou’s eGift card program through Christmas. So far, the company has limited itself to “free” forms of promotion via social media and email marketing. Although it’s too early to begin seeing final results, Vig is keeping an eye on overall weekly sales figures, in conjunction with eGift cards sales. “We will continue to monitor it in our performance management meetings, which are weekly and then monthly,” Vig says. “Once we get through our first Christmas with eGift, I think we’re going to really be able to tell [how the program is going].”

The Takeaway
As Caribou Coffee dips its toes into the world of hyperlocal marketing, mobile gift cards seem like a logical place to start. Particularly during the important holiday season, it was important for Caribou to provide a way for customers to give gift cards to friends they may not necessarily see in person. By making it easier for customers to purchase and send gift cards, Vig is hopeful that her company will see an uptick in holiday sales. She’s also eager to see the results of Caribou’s new loyalty program, which is set to launch in early 2014.

Stephanie Miles is an associate editor at Street Fight.

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Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.