Today’s consumers increasingly want to use omnichannel gift cards in stores, on websites, and on mobile platforms—but are you ready to fulfill their wishes?
Empowering shoppers to give and redeem online gift cards will help your online store increase revenue, acquire new customers, and obtain additional brand recognition, not to mention offsetting supply chain issues this year. Online gift cards are also a great and safe way to offer your valued customers an alternative way to send gifts to friends, loved ones, colleagues, or business partners.
The United States’ gift card industry is expected to grow by 9.5% on annual basis to reach $188 million in U.S. dollars in 2022. Despite near-term challenges in 2022, medium to long- term growth story of gift cards in the United States remains strong, says Research and Markets. And the growth won’t be slowing down anytime soon: the market is expected to bear $259 million by 2026.
For the second consecutive year, Blackhawk Network reports shoppers anticipate they will spend more during the holiday season—and will start earlier than ever. Surveyed consumers plan an overall 8% increase in gift spending this year, largely driven by Gen Z. Significantly more than any other generation, Gen Z respondents plan to increase year-over-year gift spend by 28%. Gift card sales are expected to see an even greater lift, with overall shoppers expected to spend 18% more on gift cards this year compared to last year, and Gen Z shoppers planning to increase gift card purchases by 57%.
Gift cards are a popular and economically resilient option because they give gift-givers the flexibility to load whatever funds fit their budget and are consistently the most requested gift year after year according to the 2022 Holiday Gifting Report commissioned by Blackhawk. Forty-three percent of consumers surveyed reported that gift cards are most thoughtful when they can choose where they want to spend it. Among the top options this year that offer more choice are a suite of multi-brand cards that pull popular brands together across top-selling categories onto a themed gift card. A majority of surveyed shoppers said they are particularly interested in multi-brand gift cards (71%) or a gift card that centers around a certain theme (62%).
While many people may be planning on increasing their spending this holiday, they are also shifting their shopping habits. Fifty-eight percent of Americans surveyed report that they plan to change their shopping behavior and are especially interested in using discounts and promotions to offset rising costs. More than half (51%) of surveyed shoppers say they are using coupons and more than 40% of shoppers report using promotions and discounts more often for all purchases.
While consumers are hoping for the worst spikes of inflation are behind us—as gas prices settle down and consumer price increases slow down—there’s no doubt that the rocky economy has made an impact. The fact is this year’s cost-of-living crisis has changed U.S. consumer behavior in the following ways:
Ninety percent of consumers believe physical gift cards are appropriate for the holidays and 77% agree digital gift cards work well too. Gen Z is expected to have the most impact with gift cards, given 28% plan to increase their gift spending this year, and they intend to spend 57% more on gift cards. Are you prepared to keep up with the demands for this year’s holiday shoppers?
If you already accept debit and credit card payments at your retail or ecommerce store, you can accept gift cards. You’ll need a point-of-sale system (POS) to sell and redeem them. Setting up a gift card system through your POS also makes it easy to create, promote, send, and track gift cards because it’s already integrated with your store and website.
Another easy way to set up a small business gift card system is with a gift card cartridge or app. These options allow you to create, sell, redeem, and track digital gift cards through a dashboard. Features you’ll want to look for to offer gift cards online include:
Gift cards are used so much now that there is a “National Use Your Gift Card Day” in January as a reminder to consumers to use their holiday gift cards! Given 37% of consumers plan to begin shopping in November, there is no time to waste—empower your customers with the options they want and deserve this holiday season.
Chelsea Mueller is a Senior Consultant in OSF Digital´s Strategy group. She has two decades of experience in ecommerce transformation and growth. She has extensive knowledge in ecommerce leadership, crafting loyalty strategy, building teams, constructing ideal tech stacks, expanding omnichannel offerings, and boosting customer confidence and conversion rates through payment enhancements including Buy Now Pay Later, alternative payment methods, and fraud mitigation.
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