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RSR Research Finds 40 Percent of Top 100 Online Retailers are Missing a Multi-Billion Dollar Opportunity

Today, RSR Research revealed the results of its second annual Digital Gifting benchmarking report. RSR analyzed the Internet Retailer Top 100, a list of the top 100 online retailers, and rated each retailer’s digital gift card offering, using 22 critical criteria. The study found that more than 40 percent of the largest retailers are missing a multi-billion dollar opportunity: digital gift card sales. While there was considerable improvement over 2010, there is still significant room for improvement in personalization of eGift Cards and mobile as a new channel.

Based on the evaluation criteria, the retailers with the highest overall scores and therefore the most comprehensive digital gift card offering are:

  1. The Home Depot
  2. Best Buy
  3. Williams-Sonoma
  4. Amazon.com
  5. Gap / L.L. Bean

This is the second year in a row The Home Depot has topped the Digital Gifting rankings. It is the only retailer to repeat in the top five.

“Over the past year, more retailers have begun offering digital gift cards to their customers, but too often consumers do not have an easy or pleasant experience purchasing a digital gift card,” said Nikki Baird, RSR Research analyst and co-author of the report. “This is a significant missed opportunity for retailers. The situation will only get worse. In 2012, having a digital gift card solution will not be enough. Consumers will expect mobile digital gift card offerings, and retailers who offer personalized digital gift cards will continue to enjoy significant differentiation.”

Other key report findings include:

  • Digital Gift Cards On The Rise – The number of retailers offering digital gift cards increased 47 percent over the past year. Today, 59 of the top 100 retailers offer a digital gift card experience.
  • Unexpected Misses – Apple, Office Depot, Office Max and Sony still do not offer digital gift cards to their customers.
  • Most Improved – Best Buy, Williams-Sonoma and Gap went from no digital gift card offering last year to top-five. Several other retailers added digital gift cards for the first time this year: Staples, Nike, Lowe’s and Overstock.com among others.
  • Mobile Leaders – With consumers increasingly turning to their mobile devices, the ability to offer mobile gift cards is increasingly important. The best mobile gift card experience today is provided by: REI, Lowe’s, Victoria’s Secret, Amazon and JC Penney.
  • Personalization Still a Rarity – Digital gift cards provide a great opportunity to personalize a gift or greeting, yet few retailers offer this service today. Only seven retailers received a ranking of two or greater in this area. Those retailers receiving the highest ranking for personalization include: Gap, The Home Depot, Staples and Toys’R’Us.

“Digital gifting is the most convenient way to provide a thoughtful gift to friends, loved ones and business acquaintances, but more retailers need to offer better personalization options,” said David Stone, CEO and co-founder of CashStar. “This study, as well as our survey of retailers at Shop.org, show retailers are aware of this personalization chasm. Some retailers have made strides in this area and I expect 2012 to be a year of dynamic change in the industry.”

Methodology
The criteria focused on the comprehensiveness of the offering, the selection experience, the purchase experience and the recipient experience. The study focused on digital gift card purchases made in August 2011. CashStar, a market leading digital gifting and incentives company, sponsored the research.

To obtain a full copy of the report with the evaluation criteria, and be provided with best practices recommendations, please email . To schedule an interview about the research, please contact Scott Love or Pauline Louie at 781-684-0770 or .

About RSR Research
Retail Systems Research (“RSR”) is the only research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry, and thought leadership and advice on navigating these challenges for specific companies and the industry at large. RSR’s services include benchmark reports covering the state of retailer technology adoption for topics ranging from merchandising and supply chain, store operations and workforce management, to customer-facing and multi-channel technologies. Custom research reports provide more in-depth views into topics of industry interest, and advisory services help retailers and technology vendors make the most of the insights RSR provides. To learn more about RSR, visit www.rsrresearch.com.

About CashStar, Inc. CashStar is the preferred digital gifting and incentives partner for retailers nationwide. These retail brands leverage CashStar to easily and securely integrate digital gifting strategies to increase sales and customer loyalty. CashStar offers consumers an unmatched personalized eGift experience via email, mobile and social channels. It is the only company to successfully combine an on-demand B2C and B2B digital gifting and incentives platform with innovative multichannel marketing strategies. More than 250 brands are successfully partnering with CashStar to drive incremental sales, increase retention and boost profitability including Best Buy, Chili’s Grill & Bar, CVS/pharmacy, Gap, Pottery Barn, QVC, Staples, Starbucks, T.G.I. Friday’s, The Home Depot, and Williams-Sonoma. To learn more about how CashStar is constantly innovating the way businesses deliver personalized gifting experiences to consumers and partners in the digital world, please visit www.cashstar.com or e-mail .

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