October 21, 2016
Finding the perfect gift for someone's birthday is a difficult task. Tack on a busy schedule, and it becomes almost impossible. There is no shame in admitting that sometimes, it's easier to grab a gift card and call it a day. According to the National Retail Federation, gift cards have remained the most asked for gift for eight years running.
That may be why in 2015, sales of gift cards in the US hit 130 billion dollars, an increase of 6 percent over the previous year. However, this is just the start, as sales of gift cards are expected to hit 160 billion by the year 2018. The largest increase was in “e-gifts,” which hit 26 percent that year, a whopping 7.1 billion dollars. This rise is expected to also help boost the growth of the payment industry as a whole.
The prospects for e-gifting in the future are promising as people switch to digital and attitudes about gift cards are becoming more favorable.
Gift Card Purchase Behavior Has Changed
When it comes to gift cards, consumer confidence and trust have actually grown. There is a natural progression to switch from plastic cards to digital cards and use smartphones for purchase and redeeming a gift.
With apps like Android and Apple Pay, it's only a matter of time before our smartphones become the many way to buy.
Retailers Are Responding to Consumers
Merchants seeking to add offerings for their customers are including customs gift cards and e-gift cards that can be used within partner shopping apps.
For small businesses, adding e-gift cards can help meet the demands of their consumers, while reinforcing brand recognition, increasing foot traffic, and encouraging more sales. These are only a few of the many benefits of offering gift cards.
Incentive and Rewards Programs
Another way retailers can take advantage of the popularity of gift cards is with incentives or rewards. According to the results of a major survey, respondents purchased an average of two gift cards per year because of the reward or loyalty points they would receive on their account. In addition, a third of people who responded to the survey chose the particular store they purchased the gift card from because of the incentive, when they had not planned in the purchase in advance. Also, 40 percent of those ended up spending more at the store than planned, simply because of the incentives.
By combining incentive and rewards programs with gift cards, for example by providing a discount on a purchase if a gift card is also bought, a retailer can convert a single visit shopper into a repeat customer who spends more. Incentives and rewards can also encourage customers to add more funds to their card after it is used. Here are some great stats on customer loyalty encouraged by gift cards.
Reloadable E-Gift Cards Are the Best of Both Worlds
Adding the ability to reload a gift card is another option for businesses to keep customers coming back for more future purchases. While most people surveyed had not yet reloaded their gift cards, with more incentives and offerings, businesses can use gift cards to build a larger customer base.
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