Gift card revenue is expected to dramatically increase at Buca di Beppo this holiday season, thanks to the implementation of digital gift cards.

“The ease of purchasing these gift cards, especially through the social mobile application, as well as the ability to personalize them, is going to be huge,” says Kyle Collins, director of interactive marketing.

“With this we can be in direct line with how consumers are doing most of their transactions today. And digital gift cards were very appealing to us because of the instant gift.”

The 86-unit Minneapolis-based chain launched digital gift cards three weeks ago through a partnership with Transaction Wireless. The service complements its traditional gift card business, which continues to do very well.

“Buca di Beppo is a celebratory restaurant where people come for birthdays, anniversaries and other events,” explains Collins, “so it’s natural that they think of us for gift cards.”

The new business was launched this month “one hundred percent deliberately” for the holiday season, says Collins. Shortly after Thanksgiving the chain will launch a mobile application for the cards. It will also increase marketing for them, using cardboard cutouts of David in stores, as well as table tents and placemats with scanable QR codes.

November and December are the busiest time of the year for gift card sales, Collins points out. “The fourth quarter, with the emphasis really being in December, is really busy, but we really see sales start ramping up the week before Thanksgiving.”

This method of selling/buying gift cards is also very flexible, for both Buca di Beppo and digital gift card buyers, he says.

For the restaurant chain, it can use Facebook and Twitter to market and send out promotions.

Its customers can use the interface with Facebook to personalize any digital gift card with photos that are already on their profile. Digital gift cards can also be sent through the social media site.

“These are things we haven’t done to date because the fulfillment of the gift card has always been so laborious,” Collins explains. “If you ordered a gift card online you’d have to wait three to four days for it to be delivered. Here it is instantaneous, the person can put a personalized message on it, even by voice, and it goes direct to that person.”

While traditionally the core gift card buyer is aged 24 to 54, a mother, and the household decision maker, Collins expects the consumer base to become much broader with the digital cards.

“I think it’s going to appeal to everyone once they try it. We’re seeing the emergence of new behavior with the consumer. Everything’s going digital.”

Adds Tom Niedbalski, vice president of business development for Transaction Wireless: “There are a lot of people 55 to 65 who are buying digital gift cards and I didn’t expect that. You think of it as being attractive to the younger demographics. But females aged in the 35 to 55 range is the sweet spot.”

Restaurants implementing a digital gift card program typically see new sales from them, Niedbalski says. And while there is some cannibalization of traditional gift card sales, much of the revenue is new.

“Digital gift cards are a more cost effective solution for restaurants,” he adds. “So that cannibalization is viewed as positive.”

It’s a new way of reaching customers, he adds, but it’s how they want to be reached.

“These are often new channels for our customers to reach their customers. Consumers are changing their behavior into a social and mobile environment and we want to enable our clients with the ability to connect with those customers regardless of the channel.”

By Amanda Baltazar

Industry News, Technology, Buca di Beppo