Brands Must Improve Online Experiences and Embrace Personalisation to Capitalise on the Growing Gift Card Market
- 24.05.2021 01:32 pm
The gift card market is growing, delivering significant opportunities for retailers
The gift card market in the United Kingdom is seeing significant growth. According to recent research from the Gift Card and Voucher Association (GCVA) supported by Blackhawk Network, the market is now worth £6.9 billion, up almost £1 billion from its previous evaluation in 2019.
A gift card strategy is critical for brands. It can be beneficial for driving sales, customer loyalty and brand awareness, as well as engaging new markets. Blackhawk Network’s analysis showed that brands failing to run gift card promotions miss out on an average of 37 percent of annual gift card revenue.
Online giant Amazon is leading the way when it comes to optimising it’s gift card strategy to generate revenue and customer loyalty. However, all retailers and brands can benefit from this increased interest in gift cards.
But to do so, they need agile and targeted gift card programmes. They also need to stay up to date with the state of the industry, as well as the performance of their own gift card programmes
To help them, NAPCO Research, in conjunction with Blackhawk Network, conducted an evaluation of the state of merchants’ gift card offerings to highlight how retailers can reap the benefits of this growing market.
Digitally native players lead the pack:
The NAPCO research scored merchants on how they promote the online sale of gift cards to consumers. Merchants were measured against a range of criteria, including discoverability, innovation and customer experience.
The research identified the brands with the most effective gift card strategy as:
Amazon.co.uk took the top spot by a significant margin, scoring above average in seven of the nine criteria categories, often significantly higher. The e-tail giant earned the maximum points available in discoverability, illustrating that its physical and digital gift card programme is easy to find across its desktop website, mobile website, and mobile app.
This is likely because, as a tech-first platform, Amazon understands the importance of synergy between online and offline and the importance of giving customers a seamless experience across all areas of the business.
The missed opportunity within mobile apps
Retailers routinely provided a weaker gift card purchase and recipient experience within their mobile apps. In fact, many do not offer gift cards within their apps at all.
Fashion retailers performed better than other verticals in the area of mobile app payment options. ASOS, Zara, Superdry, and Ted Baker offer standard Visa, MasterCard, Amex, and Maestro, with additional options including PayPal, Apple Pay, Google Pay, Afterpay, Klarna, Clearpay and Switch.
However, attention to the gift card purchase experience within apps is clearly lacking. This is a missed opportunity to drive loyalty and build a long-term relationship with customers, particularly when it comes to younger audiences - research from Comscore finds that smartphone users between the ages of 13 and 24 are the heaviest mobile app users.
Perhaps the most significant takeaway of this report is that retailers must improve performance when it comes to the ease and experience of purchasing gift cards within their apps. Especially because consumers that have downloaded a retailer’s app are more likely to be loyal and regular customers.
A personalised experience is not optional
In 2021, customers have come to expect a personalised experience in almost every aspect of the consumer journey - and gift card purchases are no different.
A recent report from Accenture found that 91 percent of consumers are more willing to make purchases from retailers that ‘remember them’ and provide relevant offers.
But the NAPCO research found that personalisation within the gift card purchasing process could be vastly improved. Advanced personalisation options that should be considered include specialised faceplates, personal photographs or video content. For example, one brand lets buyers upload a personal video alongside their digital gift card to make the experience extra special.
B2B will drive sales
GlobalData forecasts that the gift card market is set to grow 24.7% over 2019–2025, and this will be primarily driven by growth in B2B sales.
Apple successfully highlights its B2B offering by providing 50 card packs for businesses, as well displaying a nice visual promoting its gifts for business on the gift card landing page.
Looking at the bigger picture, retailers need to do more to capitalise on the B2B opportunity. The majority are leaving a significant amount of money on the table by not investing in activities to grow the number of customers who could purchase gift cards in bulk.
The retail landscape is evolving rapidly and e-commerce is booming, accelerated by the impact of the COVID-19 pandemic, as consumers increasingly move online for their shopping needs.
With this in mind, retailers that put in the effort to optimise their online gift card programmes stand to reap the benefits of this growing market.
With a few exceptions, innovation among the retailers assessed in this report was generally low, even among brands that are known for being inventive outside of gift cards.
To capitalise on the gift card market, brands should be extending the creativity that is apparent in other aspects of their business to gift cards. Doing so will help them to stand out from the competition, form a deeper and more personal relationship with customers, and drive revenue.