New strategies for retailers with digital gift cards

Gift cards are becoming increasingly popular with consumers. 80% plan to buy more this year. The number of unused gift cards drops by ¼ in 2022. Among unknown brand gift card holders, 78% are ready for a new shopping experience. Afterwards 87% even return to store within the newly discovered brands.

The choice in single-brand cards, the ever increasing use of smartphones, the alternative of the e-gift card also explain its rise.

Given this success, retailers are continuing to improve the ordering process, add new features, and expand the use of cards in their marketing and sales strategies.

The gift card, a solution to retailers’ supply difficulties

With the current context, supply issues are increasingly challenging for retailers and e-tailers. Today, 81% of consumers have already been confronted with an out-of-stock situation. Nearly the majority, 45%, go to a competitor’s website to buy a similar product. Only 28% sign up for stock notifications.

The loss in sales can be significant.

To reduce the impact of out-of-stock situations, retailers are establishing different strategies. An increasing number of retailers are using digital gift cards.

There are two strategies being implemented:

• As the holiday season approaches, Mother’s Day or any other significant event, the brand is stepping up its marketing efforts to highlight the digital gift card. If a product is ever out of stock, the consumer can choose to offer an e-gift card.
• Some retailers create automated actions. When a product is out of stock, a gift card purchase button appears on the product page. Consumers can order a gift card of the same amount to gift instead.

However, 58% of consumers are already choosing the gift card as an alternative to out-of-stock products.

The gift card helps to ensure a smooth e-commerce experience

Product returns are an essential part of customer satisfaction. At a time when free returns are being questioned by retailers, but remain an expectation rooted in consumer habits, the gift card is becoming a relevant alternative.

More and more brands are choosing to offer a gift card for the same amount as the returned product.

The benefits: the customer comes back to spend the card at the brand, and the brand does not lose its sale. This would be the case, if it proceeded to a refund.

Retailers bet on the business market

Retailers are expanding their communication campaigns, reinforcing their commercial prospecting and partnerships with HR/incentive/Works Council software to reach business professionals. The new gift card Eldorado.

But why? An increasing number of companies are providing employees with a gift card. In the last two years, the increase of the employees’ purchasing power has become the first motivation. A quick, flexible and less burdensome solution for management. All this supported by the tax exemption up to 183 € per employee in 2023.

Of course, the gift card is the best way today to provide this incentive. 90% of employees appreciate this reward format. And for 75% the gift card allows them to buy what they want.

More gift card-based promotions

With overall increases, consumers are more on the lookout for bargains, including gift cards. 62% plan to buy a card if it is on sale.

Some customers even love to combine a gift card promotion with a sale (33%). Let’s take an example. A brand decides to run a promotion on its gift card: 45€ for an amount of 50€, to be spent on products already on sale. A bargain for the consumer who gets an additional 5€ discount.

Other promotions based on the gift card exist:

• One gift card purchased, one offered
• Offer a gift card of X amount instead of a promo code.
• Offer a gift card of X euros for the purchase of a product or for a certain shopping cart amount

Increase in campaigns to celebrate micro-moments with the brand

Today, with the digital version, we can buy and send a gift card almost instantly. As soon as they receive it, the recipient saves the card on their smartphone, either in their documents or mobile wallet (53%).

A quick way to make a gift anytime, anywhere, for any reason.

Brands can then become part of consumers’ daily lives. Be at the heart of small attentions. In the U.S., consumers are already giving small gift cards (€5, €10, €15) as a thank you (37%) or congratulations. In France, the trend is growing. An increasing number of retailers are starting to create campaigns based on micro-moments.

Marketing campaigns adapted to new consumer expectations

Today, consumers are buying gift cards for three reasons. This means that there are three different messages that need to be emphasized in marketing campaigns.

Providing purchasing power

Today’s economic situation leads consumers to use strategies to increase their purchasing power.

One of them is controlling gift budgets. Pleasing loved ones is always important. And to stay within a budget, consumers choose a gift card (54%). If we have a €30 budget for a birthday, then we will buy a €30 card. The risk involved in buying a gift is that it may exceed the initial amount.

Moreover, the French make their loved ones happy, but not in any way. The gift card is also a way to give purchasing power to others. Today, many cards are purchased from supermarkets, grocery stores or gas stations.

Managing your own budget

Following the example of the United States and the United Kingdom, an increasing number of French people are buying gift cards for personal use, also called “self-use”.

Thus, the gift card can be used as a payment method for a limited amount of money within a brand. A perfect combination to control your budget. For example, you buy a gift card from a supermarket to stay within your monthly food budget.

Another reason: gift card promotions. When a brand offers a gift card from €100 to €80, some consumers see instant savings on their shopping carts. They’ll buy the gift card and then go shopping. €20 saved.

A convenient and/or experience gift

There are two types of gift card buyers.

• Convenience-oriented: 55-64 year olds (64%) and those over 65 (75%) prefer to offer a gift card because it’s a convenient gift. They buy cards for teenagers and young adults. Their goal: to support them in making a purchase. They are the most interested in gift card promotions.

• Experience-oriented: The 25-34 year olds (44%) and the 35-44 year olds (50%) like to give gift cards to introduce a brand to a loved one. The card is a good way to recommend a shopping experience and a brand. They are the most likely to buy e-cards.

Overall, almost half of all card purchases are made online, with 1/3 choosing the digital version. And 3.7 gift cards are purchased per household in 2022.

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In 2022, gift cards are still very popular. The digital version continues to grow, and business customers are increasingly adopting it. Retailers are finally understanding the full potential of the card and integrating it more into their marketing and sales strategies. The most significant development in recent years is the combination of gift cards with consumer purchasing power. Retailers are already thinking about new campaigns for 2023.

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