What do brands need to do to leverage from the growing gift card market?
There is no denying the fact that the Gift Card market is experiencing excellent growth. According to research by PayNXT360, the UK market is expected to have a compound annual growth rate of 9.3% from 2021 to 2025. On the continent, the picture is also looking promising. The French market is expected to grow at a rate of 6.6% from 2021 to 2025 whereas the German market at a rate of 9.6%.
Having a gift card strategy has become imperative for brands. It does not only drive sales, but also improves customer loyalty and brand awareness. According to the 2021 analysis carried out by Blackhawk Network and NAPCO Research, brands that fail to run gift card promotions miss out on an average of 37% annual gift card revenue.
Can brands really afford to miss out on this kind of potential? And how can brands even begin to reap the benefits of this growing market? Allow us to break things down for you:
Always on top
Brands must make sure that they stay up to date on the state of the industry, as well as the performance of their own gift card program.
Leverage mobile apps
Include the option to purchase gift cards in your apps. This will improve the user experience. It will make it easier for the user to make a purchase as it removes the barrier of going to the store or the website.
Improving the user experience will in turn increase loyalty and customer lifetime value. If a customer has already downloaded the app, they already have some trust in the brand and are more likely to be loyal. Therefore, ensuring an optimum user experience in the app will foster stronger relationships, improving the customer lifetime value.
Having multiple payment options (such as gift cards, Paypal, Visa, Mastercard) also makes the purchase easier for the user.
A recent report from Accenture found that 91% of consumers are more willing to make a purchase from retailers that “remember them” and provide relevant offers.
There is an opportunity to personalize almost any product that a customer buys these days, so it should be the same with gift cards. How can brands offer personalization to their customers? Brands can include specialized faceplates, personal photographs or video content. With gift cards often stereotyped as “impersonal”, personalization options put the power in the customers hands, giving them the freedom to choose.
According to GlobalData, the gift card market is set to grow 24.7% from 2019 to 2025, and this will be primarily driven by growth in B2B channels.
With this growth comes great opportunity, which retailers must take advantage of. Focusing on B2B channels allows brands to target customers outside of their usual sales channels and expand their reach.
Many retailers fail to untap their hidden revenue potential by not investing in the B2B customers, mainly because there is a lack of understanding of how big of a role gift cards can play in the overall commercial strategy.
The gift card landscape is in need of improvement. Whereas the good news is that these improvements are attainable. Merchants need to better understand the opportunities that are being missed, how the areas that have been lacking can be improved, and what is the best place to invest their resources.
Do you need to unlock your gift card revenue? Reach out and we will guide you every step of the way!