Gift Cards Raise Retail Revenue
Americans love giving and receiving gift cards. They are always in demand, and present retailers with significant incremental sales opportunities, as consumers report spending more when both purchasing and redeeming gift cards. According to a biannual consumer survey of 1,100 US consumers by the Retail Gift Card Association (RGCA), convenience and choice make gift cards extremely popular among consumers. Although mobile and electronic gift cards are not yet widely used by consumers, the adoption of these technologies is expected to continue to rise.
The Association surveyed consumers on their use of gift cards, preferences for giving and spending the cards, and willingness to embrace new gifting options like e-codes, which are digital gift cards that can be purchased online or through a mobile app.
Key findings include:
Significant benefit to retailers - Gift cards get shoppers in the door to purchase more; 72 percent do some shopping for themselves when going to a store or website to purchase a gift card. Gift cards also increase sales during redemption; 45 percent of shoppers will spend more than the value of the gift card when they redeem.
Gift cards are extremely popular - 77 percent of consumers have given a gift card in the past year, and 90 percent have received at least one in the past year.
Gift cards are always in demand - Most consumers don’t require a sale or promotion to purchase a gift card.
Consumers value choice - The number one reason shoppers like to give or receive gift cards is that they allow the end users to purchase what they want.
Gift cards are great for group gifts - 65 percent of consumers prefer the convenience of gift cards when giving a gift from a group.
Shoppers are savvy when redeeming gift cards - 74 percent of shoppers will wait for a sale or promotion before redeeming their cards.
Mobile and e-code gifts are still emerging - 54 percent of consumers have not heard of mobile gift cards or e-codes, and only 17 percent of shoppers are “very comfortable” using them. However, 62 percent of the respondents who choose mobile/e-code gift cards do so when they need to get it there right away.
While gift cards provide valuable choice for consumers, the retailer benefits of selling the cards are equally positive. With the increasing popularity of gift cards, and expected growth of mobile and e-code gifts in the future, retailers should be ramping up their card program marketing. This will be especially important leading up to the 2014 holiday season, when gift cards will be a go-to option for millions of shoppers across the country.
Source: independentretailer.com 8/12/14