With its sleek decor and its offering of urban-friendly kitchen gadgets, Clay has been attracting customers since it opened in early December in midtown Toronto.
"I love being in the kitchen and I always wanted to open a store that sold kitchen gadgets and things for the cook," said Carlos Flores, one of the store's owners.
The family-operated business is the second for Flores and his partners. Just a few doors down on a busy stretch of St. Clair Avenue West, they operate Cocoalatte, a pretty coffee shop that serves up soups and sandwiches for lunch.
Despite opening two new businesses within the last 15 months, Flores didn't spare any expense; from the decor and quality of products to the customer service, both shops offer clients all the conveniences of their larger counterparts.
"In order to compete with trends and bigger businesses, it was important for us to offer these right from the start," Flores said.
In spite of added start-up costs, Flores and his partners made the decision to offer re-loadable coffee cards at Cocoalatte - just like the big guys down the street - and professional gift cards complete with logo and paper holders at Clay.
"Often customers come in and are not sure what to buy as a gift," he said. "We tell them we sell gift cards and they love that. It's especially essential in a kitchen store."
Gift cards have long been the domain of big retailers and have been increasing in popularity for many years among the gift-buying public.
A study by Statistics Canada showed that in 2005, 82 per cent of large retailers were already offering gift cards, an increase of 29 per cent from two years before.
Today, gift cards can be purchased in gas stations and drug stores, as well as online, even sent to recipients through email.
Smart entrepreneurs, like Flores, are joining the large retailers to get into the multi-million dollar gift card market too.
To promote their re-loadable cards at Cocoalatte, Flores said they have started to offer incentives.
"We tell our customers at the register that if they buy a $20 card, they will get their current purchase, such as a latte, free," he said. "It's our way of introducing our customers to the coffee cards and we've been very successful with it."
Offering these types of customer loyalty incentives through gift cards is smart marketing, said Andrij Brygidyr, affiliate professor of marketing at the Rotman School of Management, and president of A and A Merchandising, a marketing services company in Toronto.
"There are two big advantages for the business owner," he said. The first is building brand loyalty by having customers come back into your store to make purchases. The second is having the purchase be pre-paid - having use of the money before any merchandise or service has been provided.
"It has certain cash flow advantages," Brygidyr said.
But before starting to use these cards to create customer loyalty programs - by sending coupons through email or offering incentives, for example - Brygidyr said business owners need to realize that these types of marketing attempts can take a lot of time and upkeep.
"It is like having a Facebook page or Twitter account, you have to put in a continued amount of effort to make it successful," he said. "Having said that, it is a very worthwhile program."