What is a gift with purchase (GWP) promotion?
Different types of gift-with-purchase promotions
At the point-of-purchase
Post-purchase fulfilment
Why run a gift-with-purchase promotion? Advantages and benefits
Added perceived value
Improved engagement & purchase confidence
Rewarding purchase and loyalty
Opportunity for customers to sample
Tips for a successful gift-with-purchase promotion
Relevant and valued gifts
Risk Management
Simple and rewarding experience
A gift with purchase promotion is when customers receive an additional item for free after making a purchase and meeting the requirements to redeem. Gifts are distinct from ‘prizes’, which are won and not guaranteed, whereas gifts are given as a guaranteed reward after meeting the redemption requirements.
Gift with purchase promotions are an effective way to give a brand’s products a competitive advantage, particularly in-store, where a product and gift will be distinctive, provided that the gift offer can be communicated.
Alternatively, some brands attach the gift to the product that the customer needs to purchase. This is often done by fragrance brands, where a brand may include a sample of another one of its fragrances in the packaging as a way for customers to test out a new product. Especially when a product can be quite expensive, offering a sample for customers to try as a gift can inspire more purchasing confidence and encourage purchase later on.
Some stores and brands will offer gifts at checkout to encourage loyalty and shopping with that brand or particular retailer. Sometimes the offer is limited to shoppers who are signed up to the brand’s membership or loyalty scheme, as an incentive to build a positive long-term relationship.
Starbucks, for example, offers ‘free cup’ days, a gift with purchase promotion where members with a Starbucks Card or the app can receive a free reusable cup with their drink order. It’s a limited-time and exclusive offer, and combined with creative and unique designs every year, it’s an offer that keeps customers interested and interacting with the brand.
In addition to in-store offers, gift with purchase promotions can also be offered and redeemed online. Many department-store style retailers offer gift with purchase offers online, for example, Harrods have ‘The Harrods Beauty Gift’, an annual gift-with-purchase offer which is valued at £450.
Customers can redeem their gift via a promotional microsite or page, and by having them go through the redemption site, it allows brands to validate and reward customers efficiently.
Gift-with-purchase promotions are frequently used in conjunction with other types of promotional mechanisms, such as instant wins and prize draws. Offering a gift with purchase is a great way to reward customers for engaging with the promotion, even if they don’t win one of the main prizes. Many brands will offer a gift alongside the chance to win prizes to keep customers satisfied, as it’s an effective way to create a positive experience for all eligible entrants.
For example, in Kärcher’s ‘Wash & Win’ and ‘Vac & Win’ promotion, customers have the chance to win various prizes, but are also guaranteed to receive a gift voucher if no prize is awarded. Offering gifts to participants will make customers feel valued and seen, even without winning the main prizes. A gift with purchase promotion makes for an effective loyalty-building technique that establishes a positive experience and relationship between the consumer and the brand.
Gift with purchase is a powerful mechanic, but a key point for success is in how much a customer has to do to collect the free item. The ease of redemption is critical; there are several reasons a brand may choose one method over the other.
Redeeming the gift item with the product purchased is the most powerful and enticing form of gift with purchase. It’s immediate and convenient for the customer. While collecting the free item at a later point is less powerful, it can still hold great value while remaining a relatively simple and frictionless process.
So, how do you know what type of gift with purchase works best for your brand? This will depend on what your brand is trying to achieve. Some brands may want to track redemption rates and shopper engagement more effectively; for this reason, brands may want to offer the item after purchase through a microsite redemption form.
There is another consideration for brands in choosing which type of GWP - the physical size of the gift. The gift may be too large or too heavy to be collected instantly and therefore, might require delivery. Or it could be a complex multiple mechanic, such as a GWP + Trade In, where the gift is delivered at the same time as the collection of the trade-in item.
Brands should also keep in mind that many customers intend to buy the product even without the GWP offer attached, which, in the case of a product with a gift attached, could be considered as wastage. Alternatively, to ensure that a gift is redeemed by a customer who desires it, an after-purchase fulfilment method, as mentioned previously, can be used. Although the offer is still available to every customer, since it requires some effort, there will be fewer claimants than offering the gift at the point-of-purchase.
For every extra step added to the redemption process, customers will drop off, so it's a delicate balance for a brand to manage their available budget by structuring the redemption journey to maximise rewards for the right customer. Whilst post-purchase claims are expected to be lower due to the added steps, this is something to consider when deciding on what type of gift with purchase that your brand wishes to run.
The gift offered as part of a promotion should be relevant to shoppers, but also something that will relate to and represent the brand. If it’s just a generic item with a logo printed on it, then the gift may provide little value and weight to the purchase. A good gift is unique, bespoke, and delivers on the brand message, product attributes, or is beneficial to customers.
This can be something that will complement the product. In the past, Silent Pool gin had a GWP promotion where, alongside a bottle of their gin, they offered a small bottle of their liquid garnish attached to the neck of the bottle. It’s a prize that’s relevant and can be used to enhance the customer’s experience with the gin, making for a complimentary addition.
With any promotion, there’s the risk of over-redemption, which can end up costing a brand far more than they anticipated. This can be mitigated and managed via a specialist promotion agency through what is known as a fixed fee. Brands can pay an agreed flat fee and, in return, won’t have to be concerned with over-redemptions. It gives the brand peace of mind, protecting them from one of the biggest risks associated with running a promotion.
However, the great part of gift with purchases that are available at checkout is that a brand can produce as many gift items as they are willing to give away. Effectively creating a limit and a ‘hard-stop’ to the redemptions.
Gift with purchase promotions tend to process and ‘move’ faster than other mechanics, both online and in-store. Gifts are often already prepared and ready to be redeemed and dispatched, as they’re not prizes where winners have to be decided. Unlike both instant win and prize draws, the ‘reward’ is guaranteed to every eligible entrant. With the gift already promised, brands can award the gift straight away, giving customers a similar experience to a winning moment.
Keep the claim journey simple for customers. The goal is to reward customers, not to make it unnecessarily difficult for them to claim their gift. In scenarios where the journey to claim is too long, brands risk losing the customer in that time, sometimes leaving them frustrated.
To find out how your brand can create and run a successful gift-with-purchase promotion with an end-to-end platform. Consider using the PromoNow platform and speak to one of our experts at no cost - get in contact with a platform consultant at +44 (0)20 380 555 38 or email [email protected] to learn more.
PromoNow is a platform empowering brand owners & agencies with rapid, flexible and seamless digital solutions for any type of promotion. We run promotions all over the UK and overseas.
