This post is contributed by Virginia Harvey and Jude Santos who are part of Epsilon's secondary research team.
Despite all the talk of the season’s hottest gift items and Black Friday and Cyber Monday spending the most requested items during the holiday season has been the same for ninth straight years: gift cards. This year, 58% of shoppers said they would like to receive a gift card according to the National Retail Federation.
Gift cards have become the go-to-present for millions of consumers. In fact, they were the top item purchased during last year’s holiday season outside of food and seasonal decorations.
Gift cards are a popular choice among consumers of all ages as they offer convenience and allow the recipient to choose their own gifts. Digital gift cards are also growing in popularity, as retailers are emphasizing that they can be used both online and in-store. 74% of consumers reported they would buy at least one digital gift card during the 2014 holiday season. Millennials in particular are gravitating towards digital gift cards with 90% stating that they were more interested in them now than two or three years ago.
One concern consumers do have is that gift cards in general are not personal enough. However, there are multiple ways to personalize a gift card, with various packaging options to add more of a personal touch. For example, JCPenney offers e-gift cards that can be customized to include a message, photos, or videos.
What does the continued growth in gift cards mean for marketers?
Marketers must consider how consumers engage and purchase with their brand and present opportunities for them to purchase gift cards in convenient ways.
For example, since 90% of millennials are more interested in buying digital gift cards, now more than ever it would be beneficial for marketers and retailers to start offering a variety of e-gift cards or digital gift cards. Additionally, millennials aged 25-34 are the leading users of mobile payment, so integration within mobile payments can increase sales of digital gift cards and add an additional layer of convenience for consumers.
Marketers shouldn’t just target one age segment when it comes to gift cards and digital gift cards as spending differs throughout generations. Adults 65+ for instance, spend an average of $200 on gift cards, while those that are 18-24 spend $114 per year.
And gift cards aren’t just for retailers. Companies that offer experiences or services (such as a wine club or tickets to a sporting event) can also capitalize on the popularity of gift cards. Giving gift cards for experiences and services can be considered as a unique form of personalization by the consumer. It can also help drive awareness of your brand.
Restaurants should also think about capitalizing on the popularity of gift cards. Since 48% of restaurant gift cards are purchased at the restaurant, these restaurant retailers should explore ways to engage customer purchase once they are tabbing out their meals. One idea is to have a featured gift card displayed inside the guest check book with an option to select a dollar value to be placed on the card. This makes for an easy and convenient way to purchase these cards, and holds a ‘pay it forward’ vibe.
For more insights on the popularity of gift cards and to view the topiographic click here.