Gift cards used to be a last-minute purchase when consumers were stuck for a last-minute gift, but they’re now a gift selected because it gives the recipient more buying choices and flexibility. The gift card marketplace continues to evolve and we’ve got some research and innovations to share to keep you up-to-date on gift card trends. CEB reported US gift card sales in 2015 totaled more than $129.7 billion, a 6.3% increase over 2014 sales of $122 billion.
A new research report by CashStar showed 91% of consumers were happy with their gift cards. The same report showed digital gift cards were the biggest growing gift card segment up 26% to $7.1 billion in 2015. According to the Incentive Research Foundation, another big trend in gift cards in 2016 is the increase in luxury gift cards for purchasing electronics (cited by 31% of respondents), open-loop gift cards (28%), luggage (24%), and watches (23%).
Lyft and Starbucks launched a joint gift card promotion each selling the other’s gift cards. C-stores have seen the impact of technology and are experimenting with digital and mobile cards. Swych, Inc launched an innovative digital gift platform and iOS mobile app for US consumers who can use a unique app to send “Swychable” gift cards redeemable at favorite retailers. Research by National Gift Card Corp shows 72% of sales came from three categories: big-box retailers (29%), open loop rewards cards such as Visa and AMEX (23%) and entertainment cards (10%). Much more insight follows.
Gift Cards 2015 – CEB Research
In 2015,the gift card industry saw steady growth, surpassing expectations about overall retail sales.
US gift card transactions generated more than $129.7 billion, a 6.3% jump over 2014’s $122 billion. Electronic gift cards are expected to rise to $7.1 billion.
Since 2008, gift card spillage (unspent) dropped from seven dollars per $100 to less than $.75 per $100. That’s still a sizable amount: based on 2015 gift card revenue, it still adds up to $973 million. Gift Cards 2015 – CEB
Study: Most consumers satisfied with e-gift card buys
When it comes to buying items with online/e-gift cards, the vast majority of consumers rate their experience satisfactory. That’s the word from new CashStar and Libran Research which found 91% of online gift card purchasers are satisfied with the experience.
The research also indicates and fewer and fewer gift card purchasers are doing so because they forgot about a birthday or event, but rather because they want the recipient to have options, and because the cards are easy to personalize.
“CashStar focuses on providing our merchant clients with a gift card platform that delivers exceptional consumer experiences. We are thrilled to learn that ninety-one percent of consumers surveyed are happy with CashStar’s online gifting experience,” said CashStar President and CEO Ben Kaplan. “This research provides a powerful proofpoint of our ongoing commitment to providing a compelling and intuitive consumer experience.” Via bizreport.com
Who are Online Gift Card Purchasers & What Do They Really Think about Their Purchase Experiences?
It hardly comes as a surprise that gift cards are an increasingly important offering for merchants of all sizes. According to the CEB TowerGroup 2015 Gift Cards Report, overall gift card sales reached $129.7 billion in 2015, with digital gift cards showing the greatest growth of any segment, up 26 percent to $7.1 billion in 2015. While the market is growing and many merchants understand the chief benefits offering gift cards can bring – like new customers, loyalty-building and increased purchase frequency from existing customers – many are left wanting to know more about who these gift card purchasers are and what makes them tick.
To help merchants understand more about the consumers that purchase digital and plastic gift cards online, CashStar and Libran Research & Consulting published a new report titled, “Gift Cards Through the Eyes of Consumers.” The report is based on research conducted in February 2016 and features insights from the more than 800 consumers who purchased gift cards through the CashStar platform and chose to provide feedback about their purchase experience and gift card buying habits. The report investigates who purchases gift cards online, how satisfied they are with the purchase experience, which features are most important to them, and what role gift card promotions play in purchase decisions. Here are a few of the highlights that the report uncovered about today’s online gift card buyers. Via paymentsjournal.com
Luxury on the Rise in Gift Card, Merchandise Programs, IRF Reports
In 2016, expect to see incentive planners embrace luxury in their gift card and merchandise programs. That’s one of the trends outlined in the Incentive Research Foundation (IRF)’s new “2016 Trends in Incentive Travel, Rewards, and Recognition” report, which predicted growing budgets and an increasing interest in upscale offerings for motivational awards.
The report, which drew on IRF’s own proprietary research as well as the responses of hundreds of professionals in the industry, pointed to a growing interest in luxury when it comes to gift cards and merchandise in particular. It pointed to the most recent IRF “Pulse Survey,” which found that growing economic confidence helped drive higher-end merchandise and gift card offerings to the top of incentive recipients’ lists. The top merchandise options included electronics (cited by 31 percent of respondents), open-loop gift cards (28 percent), luggage (24 percent), and watches (23 percent).
Additionally, IRF found that per-person spending rates are up as well. Nine percent of respondents to the “Pulse Survey” spent an average of more than $1,000 per recipient in their gift card and merchandise reward programs (though the plurality of respondents — 26 percent — spent between $101-200 per person on average). Via incentivemag.com
Lyft Partnering With Starbucks, Will Offer Gift Cards In Coffee Shops Starting This Week
Ride-sharing app Lyft is partnering with Starbucks SBUX to do something no other U.S. ride-hailing company has done: It will sell gift cards. The company announced Tuesday that it will begin selling $20 gift cards in Starbucks locations this week.
To entice riders and Starbucks customers to by the cards, the companies are offering customers a $5 Starbucks gift card with the purchase of a Lyft card, and 125 free stars, or the equivalent of a free coffee, to those customers who sign up for Lyft and link their Starbucks account in the app. Riders can also earn five stars towards free food and coffee at Starbucks if they hitch a ride between 5 a.m. and 10 a.m. Monday through Friday for the next few months, as the offer is only for a limited time.
“The partnership, we think, can help us not only reach new people, which is a huge goal of ours, but also get more people to take Lyft more frequently,” said Oliver Hsiang, Lyft’s VP of partnerships. He also added that the goal of the partnership is to “cross-pollinate” Lyft riders and Starbucks customers to drive foot traffic for both companies. Via nasdaq.com
Filling a Gift Card Niche – Convenience Store Decisions
Technology is increasingly impacting the way convenience stores sell gift cards. As a result, c-store retailers are changing their marketing approach to meet this merchandising metamorphosis.
Specifically, the technology that’s spurring a new era within the category is the advent of the electronic gift card. Sometimes called e-gift cards, digital gift cards, mobile gift cards or virtual gift cards, they are actually gift codes communicated through mobile phone text messaging, email, mobile device apps and social media.
E-gift cards are making the whole concept of gift cards more attractive to consumers. That in turn is presenting convenience stores with the daunting task of remaining top of mind among consumers when it comes to this niche segment. Via cstoredecisions.com
World’s First: Digital Gift Cards You Can Give, Get and Instantly “Swych” to Any Brand
Today Swych, Inc. announced the launch of its innovative digital gifting platform and iOS mobile app for US consumers. For the first time, consumers can use this unique app to send “Swychable” gift cards which the recipients can redeem at any of their favorite retailers like Amazon, REI, Sephora and more. Users can also upload and convert physical gift cards into an electronic form and manage all of their electronic gift cards in the easy to use app. Swych mobile app users can also enjoy exclusive discounts from selected brands generated by the unique recommendation engine of the Swych platform.
Swych delivers a smart and connected user experience that delights both the sender and the recipient. From their smartphone, anyone can instantly send an e-gift card with a few clicks and personalize it for the recipient with custom messages and photos. The gift is instantly delivered in a matter of seconds via text or email. The recipient can then “Swych” to an e-gift card of their preferred brand, get bonus cash from selected brands and deliver their thanks to the sender in just a few clicks. Swych users can also sync their gift cards in Apple Wallet for convenient access anytime anywhere. This never before user experience ensures superior user satisfaction by delivering a relevant gift every time.
“The gift card market, while growing in popularity with consumers, has been riddled with old technology and an obsolete user experience. Our vision is to make digital, the preferred method of gifting, by leveraging modern technology, advanced security and connectivity that today’s consumer expects,’ said Deepak Jain, Chief Executive Officer and Co-Founder, Swych Inc. Via prweb.com
National Gift Card Reveals B2B Retail Gift Card Redemption Data
Through its 2,000 global corporate clients in the loyalty, rewards and incentive industry, National Gift Card Corp. (NGC), a leading B2B gift card solution partner with more than 450 gift card options for use in the U.S., Canada and Europe, released its mid-year gift card redemption statistics for U.S.-based loyalty programs.
Nearly three-quarters of all gift card redemptions in loyalty and rewards programs come from just three categories:
– Big Box retailers (29 percent). In fact, just eight national retailers account for over 1 out of 4 gift cards redeemed through loyalty programs.
– Open Loop reward cards, such as VISA and American Express (23 percent)
– Entertainment gift cards, such as iTunes, GameStop, Regal Theaters, etc. (10 percent)
– Gift cards in the Home Improvement (6 percent), Casual Dining (6 percent) and Department Store categories (5 percent) occupy the redemption middle ground.
– Casual Dining, as a category, accounted for 40 individual brands.
– The lowest gift card redemption in B2B programs occurs in the Sports & Wellness (1.5 percent), Grocery/Pharmacy (1 percent), and Travel (0.5 percent) categories.
– Closed Loop gift cards (cards that may be spent at a specific retailer) outpace Open Loop gift cards 4 to 1. Via prnewswire.com
Gift Cards still growing
Gift cards clearly are still an important part of merchant and retail marketing and loyalty programs. With sales up 6% and spillage or unspent value down to $.75 per $100, consumers enjoy their gift cards and we expect that trend to continue through the end of 2016 and into next year.