COVID-19: Why Gift Cards Matter Now more than Ever
Within a matter of months, COVID-19 has transformed countless aspects of our day-to-day lives. Hence, it will come as no surprise to hear that the pandemic has left an enduring mark on consumer shopping behavior. Fear of exposure to the virus has meant that shoppers are now prioritizing safety and turning to digital options more than ever before. According to recent research, almost half of the US adult population moved most of their shopping to online, with 86% of them claiming that they will continue to shop in this way. Back to our own, more familiar European markets and we’re seeing similar trends, with new data even predicting that this mass migration of shopping habits will see online sales generating an additional £4.5bn in the UK alone this year. Here, we start to see that such a major change can also bring great opportunity for brands able to react fast.
WHAT ABOUT THE IMPACT ON GIFTING SHOPPING BEHAVIOUR?
Since COVID came along, people haven’t been able to gift in the same way. Shoppers have been unwilling or unable to spend as much time as before in shops and many can’t gift in person, meaning e-gift cards from multichannel or e-commerce brands have become even more relevant. As well as this, during the lockdowns this spring research shows a strong increase in the purchase of self-usage gift cards, with people treating themselves to food delivery, Netflix and gaming gift cards in an attempt to fill the shapeless days of quarantine. The lockdowns also inspired numerous customers to buy gift cards in solidarity with their favorite businesses in order to help them stay afloat. This touching movement, along with consumers’ worldwide shift to digital channels and online retailers, has served the Gift Card industry with impressive growth. In the UK market, new data from the GVCA and KPMG revealed that digital and eVoucher sales increased by almost 50% this year. Insights into the Dutch market from Blackhawk have shown that shoppers in the Netherlands bought 20% more online gift cards and 30% more in-store gift cards in 2020 than in 2019. This new growth is set to continue throughout and beyond 2020, with a recent report suggesting that the global gift card market is forecast to continue to grow by USD 527.11 bn from 2020-2024.
These hard months of uncertainty have also seen a growing trend of gifting culture, both in the context of B2C and B2B. Against the backdrop of the challenges faced by all companies this year, showing gratitude in order to motivate employees becomes even more significant. With team events and incentive travel being out of the picture, and home-working situations often providing little inspiration for employees, employers are having to look at other options to motivate their staff. Employer gifting in the form of gift cards is a meaningful way to show appreciation and aid employee retention and engagement, whilst simultaneously injecting retailers with a much-needed boost. Financial incentives also hold more value than ever during COVID times, as many households find themselves in tighter financial situations due to furlough schemes and redundancies. There really has never been a more meaningful time to explore the potential of B2B channels.
THE MOST IMPORTANT TIME FOR GIFTING IS JUST AROUND THE CORNER
As winter fast approaches and COVID appears to be hanging around for the holidays, both companies and consumers will need to start thinking about what the pandemic means for gifting during the festive season. With Christmas time representing up to a third of a retailer’s sales for the year, this is undoubtedly the most important time to plan a solid gifting commercial plan where gift cards often play an important role.
However, the pandemic will certainly have a significant impact on offline retailers’ sales this festive season. With customers wishing to minimize time in crowded places and many being unable to gift in person this year, retailers’ failure to adapt to these challenges will mean substantial loss of revenue.
HOW CAN BRANDS CHANGE THIS CHALLENGE INTO AN OPPORTUNITY?
Gift cards are always a favorite during the festive season. A Deloitte study on Christmas gifting in 2019 saw gift cards thriving amongst the top 5 bestsellers in countries such as the USA, UK, Netherlands and Germany, remaining within the top 10 most given gifts in the whole European market.
Now, with their amplified relevance due to COVID, gift cards become even more relevant this year.
ONLINE RETAILERS: HOW CAN YOU EMBRACE THIS OPPORTUNITY?
It’s a long-held preconception that gift cards are impersonal, so utilize the shift to online to give your gift cards a human touch. Personalized extras such as enabling your customers to add a special message or even a video will be extra meaningful to those who are unable to gift in person this year.
But don’t stop there – make your online gift card shopping experience better than ever before: create different designs and exciting bundles and ensure easy redemption to enhance customer experience.
Listen to what your consumers want: According to a recent survey, over a third of customers said that touchless was so important that it would influence their choice of retailer. This was dramatically reflected by SVS reporting a 300% increase in gift cards provisioned in a mobile app or wallet in 2020. June of this year saw contactless payments in France increasing 45%. So, transfer these statistics into actions and be sure to make your gift cards compatible with mobile apps and online payments – it’s an absolute necessity ahead of Christmas 2020.
OFFLINE RETAILERS: WE’RE TALKING TO YOU TOO!
Although in-store pain points increased this year, with almost half of UK customers reporting having had an issue in-store, there will still be customers who choose to do some of their Christmas shopping offline. This is your chance to show your customers you care by making their shopping experience as quick and safe as possible. Make your gift cards visible this year with eye-catching displays and visually attractive designs in order to offer your customers a fast and hassle-free option that reduces their time spent in-store, whilst simultaneously helping them find a great gift for their loved ones.
HOW YOU CAN UNLOCK EXTRA REVENUE THROUGH GIFT CARDS
Time to plan: You need to finalize a solid commercial and marketing plan as soon as possible. Educate yourself on gift card KPIs and how to optimize conversion and learn what consumers are looking for.
Secure: Make sure your system is solid proof. Gift cards are a currency which need to be managed securely.
Get support: Get things right from the beginning by outsourcing help from industry experts.
Get going! Q4 is the important quarter of the year for gift cards. Fully embrace this opportunity to boost revenue!
Think outside of the box: Make sure you focus on B2B sales channels too, allowing your brand to unlock the fast-growing potential of incentives, loyalty and recognition schemes.
WE’RE HERE TO SUPPORT YOU EVERY STEP OF THE WAY!
Gift cards might sound simple, but you need to do it right. As experts in the gift card industry with more than 13 years of industry experience in the European market, RL Consulting helps specialty brands and global retailers in “de-coding” and maximizing gift cards. Reach out if you want to know how to optimize your gift card scheme and expand its reach. We would love to be there to help you in getting up to speed and guide you in creating a winning strategy for your customers.