The gift card’s evolution, from 2002 to today
Originally, the plastic gift card was introduced as a way to offer a new gift option while highlighting the brand. Quickly embraced by consumers, the physical card has evolved in recent years to enter the digital age, bringing with it a host of new possibilities. Let’s explore what the different formats offer to both customers and brands, and how the gift card is now aligning with the latest digital trends.
The gift card market in France
The gift card market is booming in France, with a market value nearing 8 billion euros and an average growth rate of 8%. It’s no surprise, as 66% of French consumers prefer gifting a gift card to their loved ones over other physical gifts. It has also become one of the most popular presents during the holiday season. On average, 3.7 gift cards are purchased per household annually, with an average value of €103.
The French gift card market is gradually catching up with the U.S. market. With the emergence of new formats, innovations, and expanded usage, the gift card has become an essential tool for brands and remains highly popular among consumers, likely due to the freedom it provides.
The physical gift card: a flexible product
Gift cards have become incredibly popular among consumers due to their simplicity and convenience.
The ideal gift
Gift cards are easy to use and give the recipient the freedom to choose a gift that will bring them great satisfaction. If their purchase exceeds the gift card's value, they can easily complete the payment with another method. If the purchase is less than the card's value, they can always return to the store or website to use the remaining balance, giving them another opportunity to treat themselves.
Acquiring new customers
Physical gift cards are a source of additional revenue for brands. Offering this type of product creates a new opportunity to reach consumers who may not have been engaged otherwise. For instance, take a man searching for a gift for his wife. He knows her favorite brand but isn’t sure which product would bring her the most joy. By offering him a gift card, the decision-making becomes easy.
A reassuring format
Widely known as an ideal and easy gift, the physical format is reassuring. Gift cards are similar in appearance and use to a credit or loyalty card, which makes them familiar and easy to use.
The limits of the physical gift card
However, in a world where consumers seek unique relationships and complete personalization, the plastic card offers limited personalization options (such as choosing a design for the occasion and writing a personal message). This is an important aspect of gift-giving, as it shows "effort was made to obtain it," as explained by Virginie Pez-Pérard, a consumer behavior expert and lecturer at the University of Paris 2.
Additionally, in the omnichannel era, consumers expect a seamless experience across all sales channels of a brand. The physical gift card does not always offer an optimal customer experience. While it can sometimes be ordered on a brand's e-commerce site, the user often has to pay for shipping and wait several days for its arrival. This lengthy process detracts from the joy of giving. Moreover, the customer needs to remember to carry the card with them when shopping in-store – if they haven’t misplaced it by then.
The digital gift card: ultra-customizable and omnichannel
With the rise of digital services and payments, the gift card has undergone a transformation as well. Its digital version ushers the gift card into the digital landscape, offering a more advanced alternative to the traditional format. Instead of receiving a piece of plastic, recipients now get a PDF via email.
Instant delivery
Gone are the days of shipping fees. Once generated, the e-gift card is instantly sent to the recipient. This fast and reliable process enables brands to reach new consumer segments, such as last-minute shoppers or those too busy to go gift shopping.
Ultra-customizable
The digital version of the gift card opens up endless personalization possibilities. While the physical card limited users to choosing a design and writing a message, today’s digital gift cards allow users to fully customize the experience from start to finish—choosing their own photos, creating videos, and writing ultra-personal messages.
A perfect omnichannel solution
The digital card is fully omnichannel. Harder to lose than its physical counterpart, it’s accessible at any time from the recipient’s computer or smartphone. It can be easily used both in-store and online, via a code or QR code. Checking the remaining balance or expiration date is as simple as logging in online.
M-commerce
Today, mobile commerce (m-commerce) accounts for 35% of e-commerce in France, and the number of French consumers using their smartphones for shopping is steadily increasing. It’s therefore essential to offer e-gift cards that are easily accessible and usable on mobile devices.
Additional features
The digital gift card comes with a host of new features, such as delayed delivery or group gifting. Its speed and immediacy also allow marketers to send cards with a single click as part of loyalty programs or customer service strategies. Referral programs, partnerships, contests—these are just a few of the many ways gift cards present a valuable opportunity for brands.
Ultimately, gift cards, like other payment methods, are becoming digital. We’re seeing a surge in online payment solutions addressing e-commerce challenges, like Stripe and Square, and the rise of e-wallets primarily driven by GAFA (Google, Apple, Facebook, Amazon). The evolution of the credit card itself, now featuring contactless and biometric capabilities, was recently showcased at the CB 2017 Forum.
An expanded use of the gift card
In recent years, digital gift cards have evolved significantly, both in terms of features and how brands utilize them. Their scope continues to expand as they adapt to emerging trends.
Mobile wallet functionality
This new mobile marketing channel allows consumers to save their gift cards for contactless payment in physical stores. It also opens a new communication frontier through push notifications, offering brands an opportunity to engage more directly with customers.
At the heart of branded currency
Today, a simple gift card program is no longer enough to stand out. The challenge for brands is to start thinking in terms of "branded currency"—seeing the gift card as a true brand currency that plays a vital role in a broader strategy. With a significantly enhanced customer experience, clients can now manage their branded currencies—just like at a bank—through the use of gift cards.
The self-use phenomenon
Nowadays, consumers are just as likely to purchase gift cards for their own use as they are to buy them for someone else. The gift card is no longer seen solely as a gift but as a payment method. This trend, known as self-use, refers to the practice of purchasing gift cards for personal reasons: to receive discounts, budget expenses, or treat oneself for a special occasion.
A new target: professionals
The B2B market is a growth driver not to be overlooked. Being present in corporate HR incentive programs offers a great opportunity to boost brand visibility and increase revenue. Additionally, the pandemic has made gifting a new priority for companies. Incentive programs are becoming more common, and the gift card is the ideal gift for 68% of employees.
Key points to watch
Security: a top priority
Due to its ease of purchase, the digital gift card is more susceptible to fraud. A fraudster who successfully validates a payment with a stolen credit card can instantly receive their e-gift card and spend it anonymously in-store. Implementing protection and preventive measures is therefore crucial.
To meet the varying expectations of different consumers and maximize opportunities, it’s wise to offer both physical and digital formats. This way, consumers can switch between the two based on their needs and preferences.
