The impact of Gift Cards in the Cosmetics and Perfumery sector in 2023
Overview of gift cards in the beauty and perfumery sector
In the cosmetics and perfumery sector, gift cards play an essential role by offering a versatile and appreciated gift solution for many customers. With an average value of €59, these cards provide financial flexibility, allowing recipients to choose from a wide range of premium beauty and fragrance products.
Additionally, nearly 20% of gift card holders make complementary payments averaging €22, demonstrating their engagement with their shopping experience. The most frequently chosen amounts are around €50, €30, and €20, reflecting an attractive price range for various budgets.
Moreover, with a range spanning from €10 to €800, these cards offer adaptability, enabling customers to select the amount that best suits their needs and preferences.
Combining these factors, gift cards in the cosmetics and perfumery sector prove to be an ideal gift choice, offering both practicality and personalization. It's also important to note that the cosmetics and perfumery sector is one of the most dynamic, often ranked in the top 3 during peak times, and remains in high demand.
Expired gift gards: A challenge for E-Commerce and beauty retail
Data on gift cards in the cosmetics and perfumery sector reveals significant trends. On average, the amount of expired gift cards is €18. Expired gift cards are an interesting metric to consider when calculating the ROI of the gift card program, as the brand retains the value of unused gift cards by accounting for them as Miscellaneous Income.
However, it is preferable for gift card holders to spend their gift cards. Indeed, this helps acquire or retain customers and generate additional payments. Thus, the expiration rate of 12% highlights the importance of implementing strategies to encourage the use of gift cards. Ideally, the rate should be below 10%.
Seasonal impacts and the potential of Gift Cards
Regarding sales trends in 2023, analysis reveals that 45% of sales are concentrated in December, with a peak between December 19 and 24. Additionally, it is noteworthy that 20% of gift card sales in May are attributed to Mother's Day, highlighting the seasonal impact on purchasing habits. Finally, the average value of gift cards offered during marketing campaigns reaches €112, demonstrating their potential as a tool for loyalty and promotion.
These data indicate that gift card sales primarily occur during peak times, emphasizing the importance for brands to coordinate their marketing campaigns throughout the year.
The power of B2B Gift Cards for Cosmetics and Perfumery brands
In the B2B sector, gift cards play a crucial role by offering a flexible and appreciated solution for businesses. This service allows them to reward their employees, retain their customers, or stimulate their business partnerships. By offering personalized gift cards tailored to professional needs, brands can generate revenue through B2B, increase visibility, and boost customer acquisition through gift card recipients. This is especially true for cosmetics and perfumery brands, which are highly sought after by employees.
On average, more than 120 recipients benefit from these cards, with an average value of €60 per card. This demonstrates the extent of their use in reward programs, employee incentives, or corporate gifts. Additionally, discounts are commonly offered, averaging 9% on the value of gift cards, present in about 20% of B2B orders. Regarding payment methods, the majority of transactions are made by bank transfer (60%), followed by checks (6%) and credit cards (3%).
This diversity of payment methods allows businesses to adapt their financial processes to their specific needs, thereby strengthening their partnership with the brands.
Distribution of beauty brand gift cards
Distribution, meaning offering gift cards to third-party resellers (CSE solutions, loyalty programs, etc.), today represents more than two-thirds of the revenue from a brand's gift card program. Beauty sector brands are no exception. Although the sector is competitive, with relatively high commissions for resellers, the strong demand from end customers and the additional payments made generate significant additional revenue.
In 2023, the cosmetics and perfumery sector stands out for its diverse distribution of gift cards among various stakeholders, offering attractive average amounts of €49. The most common face values for these cards range from €15 to €100, with a predominance of €50 amounts, closely followed by €30 and €20 amounts. These gift cards are associated with average commissions of 18%, with an average complementary payment of €11.
In this distribution dynamic, CSE/incentive employee programs largely dominate, representing 86% of gift card sales. Companies highlight these programs to reward their employees and strengthen their engagement. Conversely, loyalty programs and B2C marketplaces occupy a smaller share of the market, with 7% of sales each, but remain important channels for reaching specific users.
In summary…
Data on the impact of gift cards in the cosmetics and perfumery sector in 2023 highlights their crucial role as a strategic lever for brands. With an average spending amount of €59 and a strong potential for additional purchases, these cards clearly encourage increased consumption, especially during key moments such as the Christmas period, where they generate 45% of total sales.
To optimize revenue from gift cards, it is essential for brands to effectively target their campaigns during these consumption peaks. Implementing an integrated gift card strategy, encompassing both B2C and B2B segments and well-defined distribution channels, is fundamental.
A comprehensive program must offer a smooth purchase journey tailored to customer needs while supporting the brand's long-term objectives.
