In the ever-evolving landscape of consumer brands, staying ahead of the competition requires innovative strategies and making sure customer needs are met. As we dive into 2024, one powerful tool gaining momentum is the gift card program.
The global gift card market was valued at a whopping $600 billion at the end of 2023 and is expected to go up to $1500 billion by 2031.
But the real question is: Why should you consider a gift card program in 2024?
The one sentence answer is: Because that is what the customers are telling us.
Let’s dive deeper into it.
Customer Acquisition / re-acquisition
Due to Covid-19, the adoption of virtual payments have increased dramatically. This has also fueled the growth of virtual gift cards. A good majority of customers have moved their shopping from the store to e-commerce sites. Customers expect a virtual gift card that can be redeemed both in store and online.
Opening up new Sales channels
Businesses are becoming aware of the need for employee engagement and satisfaction. Multinational companies are actively incentivizing their employees to achieve their goals. One of the major incentives is Gift Cards. Entering the B2B space opens up a whole new sales channel for consumer brands and we have seen many consumer brands with over 60% of their total gift card sales coming from B2B.
Gift Cards – A marketing tool
Brands are using gift cards to enhance customer loyalty programs and increase customer engagement. This not only helps brands to retain customers but also target a wider customer demographic with a well-balanced mix of rewards, boosting gift card adoption.
Data is key
Gift card programs provide valuable data insights that can inform marketing and sales strategies. Brands can analyze redemption patterns, customer preferences, and geographic trends, allowing for more targeted and effective campaigns. This data-driven approach empowers brands to make informed decisions that resonate with their audience.
Boosting Revenue and Cash Flow
Gift Cards also boost sales and improve cash flow. Upon redemption, customers spend more than the card’s value, resulting in higher basket size. Additionally, funds from gift card sales are collected upfront, providing a positive impact on cash flow and offering a financial cushion for the brand. Up to 25% of gift cards also go unredeemed, which is an added benefit.
As we navigate the complexities of the consumer brand landscape in 2024, implementing a gift card program emerges as a strategic move with multifaceted benefits. The advantages are quite clear. Brands that embrace this powerful tool are not only meeting the evolving needs of their customers but also positioning themselves for sustained success in the years to come.