If you were in the ecommerce game last year, an unprecedented issue occurred when Covid-19 caused the whole world to really go online. While there has been an ever-growing trend to buy and sell things online, Covid-19 practically made it a necessity. Store owners who were previously exclusively brick-and-mortar or tradeshow-oriented, had to figure out a way to reach their customers. The solution, ecommerce. And with this well-won solution came a slew of new problems, one of the most impactful being shipping problems.
The Pandemic Exposed and Broke a Weak Supply Chain
Experts in the ecommerce industry are signaling the need to be prepared for a series of problems worse than 2020's "shipageddon." A period of time in which shipping companies were not able to keep up with the sheer demand of online shopping. NBC News reported back in 2020 that shipping companies were expecting to be short 7 million packages per day during the holiday shopping season [source]. This year, it's likely going to be worse.
Suffice it to say, we're in a bit of a jam this holiday season.
2021 has not been kind to our supply chain and unfortunately Murphy's law won out with a series of events making a brittle system even more fractured. In early 2021, the Suez Canal was blocked for nearly a week where it was esimtated that approximately $9.6 billion in trade was disrupted [source]. USPS started warning business owners and consumers that mail would be more expensive and slower this year [source]. And a backlog of container ships are piling up on the west coast ports with not enough truckers to take them anywhere [source]. Suffice it to say, we're in a bit of a jam this holiday season.
The Answer to Our Problems is Gift Cards
So this whole shipping thing is bad. Real bad. This Tweet thread from Ryan Peterson, the CEO of Flexport (a company who specializes in supply chain management), got a lot of attention on how to fix the current shipping problems on the west coast, but it may not be all the complicated. It turns out, the most direct solution to our shipping problems this season could be gift cards.
A Surging Solution
Gift cards have been around forever right? Eh, maybe not forever. Try 1994. It was first utilized by Blockbuster! Before, folks used gift certificates (arguably the same thing) and Blockbuster used the gift cards as a means to get around counterfeiters [source]. Now gift cards, and not gift certificates, are a standard in most stores.
Shopify recognized and saw the importance of gift cards at the beginning of the pandemic, when they announced in April 2020 that gift cards would be made available on all Shopify plans [source]. Gift cards become the perfect solution because folks who may not be able to get what they want on time, due to supply chain issues or shipping issues with the proximity to a holiday or special event, can receive a digital gift card immediately. It's the perfect fix! No more relying on USPS, UPS, or Fedex.
If you're still not convinced that gift cards are the answer, check out this article from Bloomberg about how the prepaid card industry blew past $2 trillion during the pandemic and it's expected to be at over $4 trillion in the next several years --> article.
Gift Cards on Shopify
Here are the help docs from Shopify on how to get gift cards up and running on your store, https://help.shopify.com/en/manual/products/gift-card-products. The long and short of it is, gift cards are treated as a special separate product on your store, the sales are even reported differently so you can see just how effective they really are.
Even Better Gift Cards on Shopify with Govalo
Gift cards are great on Shopify! But, if you've ever had to set them up or use them you know that the process is a bit...well clunky. There are definitely some spaces where this process could go better and because of that there have been additional gift card solutions that have popped up in this space so you can become even more effective. And while there are multiple options, the one I'm personally most excited about is Govalo.
This is not a paid promotion but I will say I'm a big fan of anything Kelly Vaughn does. Kelly is a big name in the Shopify space and the owner of The Taproom, a certified Shopify Plus agency. Both she and Rhian Beutler co-host the Commerce Tea podcast (highly recommend) and created Govalo together.
So, what is Govalo and why would you actually pay money to use an app rather than just use what's natively available in your Shopify plan? The simple answer is convenience. The UX (user experience) for your customer using Govalo is so much simpler than Shopify. I won't go into too much detail, but some of my favorite things after testing out Govalo on a development store are:
- Dead simple setup. Steps include: image, text, amounts, and then - it's in your products!
- Up-to-date with current app embed process (online store 2.0). Does a great job walking through the process
- Options at purchase include send the gift card, SCHEDULE the card (huge deal!), and add a note
- If you update a new theme, there's even a friendly little email reminder to reinstall to your new theme
- When a product is sold out, automatically include a button to purchase a gift card instead for when it's available again (huuuuge and I bet it can be tied in really well with Klaviyo's Back in Stock Flow)
Get Gift Cards Set Up Today
So while there's not a whole lot you can do about our supply chain issues, you CAN make sure you're offering gift cards on your store to give your customers the option and motivation to come back. Shipping issues can be tied to customer loyalty, a store that is not able to follow through on shipping expectations is going to lose their customers. At least if there's an option to provide to customers, and friends or family of customers who know it's a store your existing customer loves, you'll be able to recoup those sales rather than lose them to another brand who may just have gotten lucky with shipping this season.
Use Govalo or Shopify, but at a minimum get set gift cards set up on your store as quickly as possible.