Anyone who has ever had to buy a gift on a busy schedule knows how great gift cards are. They are a quick and easy way to thank someone for a good job or wish them a Merry Christmas. It also allows the person receiving the card to get what they really want, and is as simple to use as cash or a debit card.
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, which was 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 there are more and more options for that have become popular with the mainstream population, and people switch to digital instead of plastic cards. Research has shown that oftentimes a consumer will spend more during a shopping trip than what is on their gift card, resulting in overall higher sales for the retailer. According to the NRF (National Retail Federation), gift cards have remained the most-asked-for gift for eight years running.
The way in which people use their gift cards has changed over time.
The market for gift cards is significant. However, even though these cards have a wide range of appeal, attitudes about gift cards are changing.
When it comes to gift cards, consumer confidence and trust have actually grown. This is great news for retailers, for many reasons.
First of all, a virtual gift card costs less to produce than a plastic one. They are flexible to use and can be tracked, giving retailers lots of useful data on their consumers. Additionally, once consumers successfully redeem a gift card using their mobile device, they become more comfortable making future payments in this manner.
Retailers are responding to demands from consumers.
Any merchant looking to capitalize on how popular the gift card market is would be smart to offer a custom gift card option on their websites. It is an easy way to stay current with demands from customers. Having the option of an e-gift card, as well as providing physical and virtual cards that can be used with apps that store gift cards are also smart steps.
Doing so will meet demands that consumers want, 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 2 gift cards per year because of the reward or loyalty points they would receive. In addition, 1/3 of people who responded 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 gift cards can prove to be a great opportunity.
Adding the ability to reload a gift card is a great idea. This is because a customer who reloads a card will be making purchases in the future. Most people surveyed had not yet reloaded their gift cards, however that can change quickly, especially as more customers adopt the advanced features showing up in the world of gift cards.
As people find new ways to purchase, manage, and use their gift cards, retailers need to keep up with the most current trends and technology. If they do this, they can see a great return on their investment.