An e-commerce platform wants to enable its users to buy and send gift cards to their loved ones. How would you go about building that feature?

Can you tell me what this e-commerce platform exactly sells? à Assume anything such as Flipkart selling multiple products, Swiggy delivering food, MakeMyTrip helping with travel bookings

Do these gift cards allow purchase on other platforms? à You can decide

Is there any market research or user study done to understand why the e-commerce platform is building the feature of gifting gift cards? à No such material is available

Are there any time or budgetary constraints that I should be aware of? à None

Okay, an e-commerce platform basically functions as a marketplace with sellers selling products on one side and the buyers purchasing those. I am assuming that the mission of this e-commerce platform is to make your purchasing journey relaxing, convenient and fun.

E-commerce market is no longer an emerging market. There are multiple players competing for market share. So, the main goal of these players is to acquire more users, nudge them to engage more and perform more transactions. For my answer, I will consider an e-commerce platform operating in India.

I will structure my answer by first discussing the user segments and picking up one of those as our target segment. Next, I will look at their pain points and prioritize them based on severity and user goal. Then, I will brainstorm a few solutions for the feature and prioritize them.

User segments:

Since the e-commerce market is yet to penetrate the tier-3 cities, I will consider the users of Tier 1 and Tier 2 cities.

• Kids with fixed pocket money + college students with small disposable income
• Working professionals with busy lives and high disposable incomes
• Senior citizens who are somewhat averse to technology but with quite high disposable incomes

The last user segment is somewhat averse to technology as well as averse to purchasing products online. They believe in evaluating items physically and then only purchasing.

The 1st user segment don’t have their own income to spend and hence extracting revenue from them is an arduous task.

The 2nd user segment leads busy lives so would be willing to pay for convenience (platform’s mission) . Also, this segment consists of a huge proportion of the population, i.e., a higher TAM. --> Our target segemnt.

Pain Points:

1. Need to give presents to many friends and relatives on various occasions every year and don’t really have the time to think and purchase anything useful or what they will love
2. Would prefer their kids not to squander their money and rather use on important items
3. Need to give presents to folks not staying in the same city (transferring money online does not seem like a gift)
4. Sending gifts to loved ones staying far away involves typing in the right destination address, phone number and then loved ones not being available at the time of delivery à the entire process is cumbersome
5. Not interested in giving hard cash as gifts in hand especially to friends and colleagues

Overall, user goal seems to be to find and give gifts easily at the comfort of your home which are perceived to be useful. At this stage, instead of prioritizing the above pain points, first let’s brainstorm a few solutions

Solutions:

1.       Online gift cards

2.       Physical gift cards

3.       Restricted gift cards

Solution 1: Online gift cards –

a) The users can purchase online gift cards worth a certain amount after logging into their accounts. To gift the card to their loved ones, the user can mention their phone number or email address with which there is an account in the e-commerce platform. Once purchased, the loved one will receive a notification of the same and the same will be reflected in their e-commerce platform account as well. While purchasing items and checking out, the receiver can utilize the gift card to pay partially or fully and the receiver can use it for multiple different checkouts.

b) The gift cards being offered

• can be of their own company i.e., allowed the receiver to purchase items on the e-commerce platform only or
• can be of some other company with whom the e-commerce platform has entered into a partnership or agreement or
• can be applied to purchase on the e-commerce platform or on any other company platform

To gift the card to their loved ones in the last 2 cases, the user can mention their phone number or email address with which there is an account in the other company platform. Once purchased, the loved one will receive a notification of the same and the same will be reflected in their other company platform account as well. While purchasing items and checking out on the e-commerce platform or any other company platform, the receiver can utilize the gift card.

For example: An e-commerce platform such as Swiggy can enter into partnership with Licious (online meat delivery service) or Uber (both can engage to increase their market share)

c) The gift cards can expire after 3 months, 6-months or 1 year with proper notifications to the card receiver. If expired, the gift card purchaser can be refunded the entire amount the 1st time such a thing has happened and for subsequent such scenarios, refund can be like 25% or so or none.

d) The gift card purchaser can be presented with 3-5 options for the notification content, or the content can be entirely built from scratch by the gift card purchaser. This is to provide the same personalized touch when someone presents a gift in hand.

Solution 2 – Physical gift cards:

a) The users can purchase physical gift cards worth a specific amount after logging into their accounts with user providing the destination address and phone number. The gift card can have a unique code which the receiver can use while purchasing items and checking out. The receiver can utilize the gift card to pay partially or fully and the receiver can use it for multiple different checkouts. If possible, such gift cards can be made available in select retail stores for purchase.

All the points “b”, “c” and “d” are applicable here as well.

An ecommerce platform such as MakeMyTrip can offer physical cards which one can purchase and present as gift to their friends for a wedding. The couple can utilize it for their honeymoon and will be perceived as a very useful gift.

Similarly, a furniture selling e-commerce platform can offer physical cards which one can purchase and present as gift to their friends for a wedding. The couple can utilize it for buying furniture for their new homes and will be perceived as a very useful gift.

For ecommerce platform, such as Swiggy, such gift cards may also be available offline in certain restaurants if required from where people can purchase. (There may be concern that Swiggy wants people to order more and visit restaurants less but dining out and food ordering will coexist and Swiggy has already added the “Dineout” feature to its platform)

Solution 3 – Restricted gift cards:

a) While purchasing physical or online gift cards which are of their own company i.e., allowing the receiver to purchase items on the e-commerce platform only, the gift card purchaser can also add the category of items the receiver can purchase with the gift card or the category of items that cannot be purchased with the gift card.

For example: A mother purchasing a gift card on Swiggy and giving it to his/her school/college kid might add restrictions that using the gift card the kid should not be able to purchase any tobacco items or liquor.

Initially to encourage users to start buying gift cards, users purchasing “x” number of gift cards in a month, 3-month or 6-month period can get certain discounts on their own purchases.

1. Keeping in mind the business goal of convenience and fun while purchasing, in the initial phase of the feature, the point “a” of the solution 1 should be implemented as it is the base case to resolve all the pain points.
2. Next, “d” of the solution 1 (because the process of gifting requires personalization and to increase user satisfaction and trust) and “c” of the solution 1 should be implemented next.
3. Depending upon the progress and the forward strategy, solution 2 or “b” of solution 1 should be implemented.
4. Solution 3 can be implemented at the end since the market to be addressed seems to be small and the pain point being addressed with this solution seems to be not very severe.