The rise of digital receipts: Retailers weigh in

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Andrew Frawley
Andrew Frawley

According to a recent survey conducted by Epsilon, 35% of retailers currently offer digital receipts, also known as electronic receipts. Of those with a digital receipt program in place, half offer them across their entire store footprint while a third offer them in select store locations only.

The survey, which was sent to 3,900 retailers, was designed to gauge how retailers are utilizing digital receipts and the driving forces behind their strategies.

Introduced by Apple in 2005, digital receipts are becoming more prevalent as consumers continue to extend their connectivity with tablets and mobile devices. Digital receipts offer a way for retailers to comply with their customers' digital lifestyles. Popular brands employing electronic receipt programs today include Gap Inc. (comprised of Gap, Old Navy and Banana Republic); Nordstrom; Best Buy; Whole Foods; Sears; and Macy's.

So how can digital receipts benefit not only consumers, but also brands?

First, they're a great vehicle for acquisition list growth. Our Epsilon survey found that of those retailers offering electronic receipt programs, 83% offer them for email acquisition.  In order to receive a digital copy of their purchase receipt, customers must supply an email address. This point-of-sale offering creates a window of opportunity to connect with customers while they're attentive and engaged.

The second most popular reason for using digital receipts is the value added for the customer — convenience. The growing adoption of digital receipts and their use by customers signals a larger trend: the use of technology to enhance the customer experience. Digital receipts aren't meant to replace their paper counterparts, but to ease customer transactions and provide added value.

In addition to transactional information, brands can incorporate personalized messaging with their digital receipts, another added convenience for customers. Messaging might include up- and cross-sell marketing that reinforces complementary offerings and recommendations based on previous purchases, second chance offerings and loyalty or reward program status.

An added benefit of digital receipts for brands is extra security. The National Retail Federation estimated that annual return fraud cost retailers roughly $14.37 billion in 2011. Digital receipts help protect the integrity of a transaction because they give retailers the ability to better track legitimate store returns. Customers can access their own records and store clerks can quickly search for a receipt at the register, thus speeding up the return process and keeping returns true to the original transaction.

Digital receipts are truly revolutionizing and enhancing the shopping experience. Retailers are embracing electronic receipts because they offer shoppers a new way to engage with brands while also giving marketers a new vehicle to communicate with their customers.

However, the benefits aren't limited to retail. Other industries are also taking advantage of the technology, including financial services and travel/hospitality.

Regardless of your industry, here are five key recommendations to ensure brands get the most out of their digital receipt programs:

1.      Use your digital receipts wisely. Adjust promotional content in the digital receipts based on the type of products you offer and the buying patterns of the individual customer. For example, it would be ineffective to promote the exact same product the customer just purchased in the receipt. Effective use means promoting complementary products or targeted offers.

2.      Incorporate branding. Be sure to add relevant branding. Make good use of HTML coding to ensure your message is impactful and does your brand justice.  Paper receipts traditionally lack the branding, imagery and creative that can be reflected in a digital receipt. Links to your website and social sites are another way to reinforce the brand and create a deeper customer experience.

3.      Make transactional messaging the priority.  Transactional email messages typically have higher open rates than typical marketing messages — 42.8% according to Epsilon's Q2 2011 Email rends and Benchmarks report. It's important to keep transactional messaging front and center and design your digital receipt so that promotional content is secondary.

4.      Take advantage of “white space” marketing. Include up-sell and cross-sell recommendations based on a customer's product purchase to create relevance for additional items that can complement that purchase, especially when the consumer is in the buying mode. If the customer is a loyalty member, use this opportunity to provide information about his or her points balance and suggestions for redemption.

5.      Test your content and measure results. Make sure your content is visible when customers open their digital receipts. Check any HTML links in your email before deployment. With any email marketing campaign, track and analyze results. See what is resonating with consumers and adjust accordingly.

Andrew Frawley is president of marketing services firm Epsilon.

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