Viewpoint: Holiday Forecast: Gift Cards Continue to Expand the Online and Mobile Landscape
By Teri Llach, Blackhawk Network
It should be no surprise to anyone in the prepaid industry that gift cards are forecasted to be uber popular again this holiday season. Gift cards have topped the list of the most requested gift items for nine years in a row, according to the National Retail Federation’s 2015 Holiday Consumer Spending Survey.
However, like all payments tools, prepaid will continue to be affected by fluctuating shopper trends, which are, in large part, dictated by a population increasingly plugged in to online and mobile technologies. It will be crucial for those in the prepaid industry to be mindful of these shopper preferences (particularly during the holidays), so prepaid products meet the demands of today’s tech-savvy consumers.
Blackhawk Network recently surveyed* more than 1,100 U.S. shoppers about their purchasing habits and plans for the holidays, and found that 60 percent plan to give some type of a gift card this holiday season. Interestingly, despite an overall trend toward online and mobile gifting, consumers still maintain a preference for physical gift cards over e-gifts. Seventy-seven percent of consumers that we surveyed who will buy gift cards plan to give more physical cards than e-gifts this year. Additionally, shoppers still prefer to buy gift cards in person; 49 percent report that they’ll buy them at a grocery store and 47 percent at a big box retailer.
Despite an inclination toward physical gift cards, roughly a quarter of the shoppers surveyed who will give gift cards this season also will choose e-gifts for long-distance, special-value or late gifts. This percentage shows the promise for this category. To encourage greater e-gifting, it will be important for retailers to ensure the purchasing and redemption processes are easy for shoppers and recipients. Consumers say they would give e-gifts primarily because they are a quick way to send a gift (53 percent) and are simple and convenient options for the gift giver (50 percent). However, 44 percent say they are concerned about how easy it would be for recipients to redeem e-gifts.
Another trend that may bolster gift cards’ appeal for self-use this holiday season is the gift card exchange. With the growing popularity of gift card exchange Websites like Cardpool.com, consumers can sell gift cards they will not use or purchase gift cards at a discount. Savvy shoppers can buy gift cards at a discount and use them to shop and save money on each present purchased.
Retailers also should remain cognizant of how consumers determine which gifts they will buy. Shoppers continue to use a variety of methods when researching and purchasing gifts, making it imperative for retailers to meet consumer needs across multiple channels and provide them with a consistent and easy-to-use brand experience. Our survey showed that when researching gifts to purchase, more consumers look online (73 percent) rather than using other methods, like visiting physical retail outlets (66 percent) or asking people what they want to receive (46 percent).
Finally, with the future in mind, it’s noteworthy to consider that the coveted millennial shopper demographic is interested in adopting new or alternative ways of gift giving. For instance, 61 percent of those surveyed have redeemed or would be interested in redeeming their loyalty points for a gift card or merchandise to give someone else and 54 percent have used or would be interested in using a group gifting Website that enables multiple people to contribute to a single gift.
For retailers and marketers this holiday season, meeting consumers’ gift card needs and maximizing sales will require a mix of promotions across channels, compelling designs and the ability to be nimble in providing the best online and physical shopping process.
Teri Llach is chief marketing officer, Blackhawk Network, a pioneer of prepaid gift cards, payments tools and rewards delivered via a robust and convenient network. Teri recently was recognized as one of the Women Driving Payments Change in the Fall 2015 issue of Pay Magazine. She can be reached at [email protected].
*About Blackhawk’s Online and Mobile Gifting Survey
Blackhawk’s Online and Mobile Gifting Survey is an Internet-based survey conducted by Blackhawk Network in September 2015. The sample size included 1,140 American respondents.
 National Retail Federation’s 2015 Holiday Consumer Spending Survey, October 2015, 7,276 respondents.
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore’s goal is to present many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.