Birthdays, anniversaries, holidays upon holidays…. Shopping for gifts is a year-round activity. And while some people love searching for that perfect present, more and more customers are turning to gift cards for gift giving instead.
More than a consumer spending trend, gift cards have been around a long time. But unlike the store vouchers and gift certificates of yesteryear, gift cards have no value until they’re loaded up at the point of sale, making them far easier to display. Boosted by new visibility and a seamless buying experience, gift cards are quickly becoming the preferred gift for purchasers and receivers alike and forecasts suggest gift card popularity will continue to grow. Consider the statistics:
- 55% of people’s yearly gift giving budget will be spent on gift cards
- 33% of people will spend more on a gift card than an actual gift
- 47% of consumers between ages 18 and 23 prefer receiving gift cards
- 50% of consumers up to age 37 are interested in buying gift cards
- The average consumer spends $59 more than the value of the gift card
For businesses, gift card marketing involves offering and promoting gift cards as a way of letting customers access products and services. It’s an indirect form of marketing that helps brands get customer referrals, convert customers, grow larger audiences and take advantage of seasonal shopping trends. To leverage gift card marketing, it helps to know what’s behind the rise in gift card popularity. Here’s what shoppers and businesses love most.
Why Shoppers Love Gift Cards
Gift giving is more than shopping, buying and wrapping – it’s a fundamental part of human relationships. For every $10 spent by an average American, $1 is spent on a gift!
As a social ritual, there’s a lot of high high-stakes psychology behind every single gift exchange. A gift represents you as a person and reflects your view of the gift receiver. A poorly chosen gift could signal a mismatch between your perception and the receiver’s personality. With gift cards, you can offload some of that fine-tuned decision-making to the recipient and give them the freedom to select the item they prefer from a particular store.
For instance, if someone loves state-of-the-art gadgets, but you don’t know anything about new tech, a gift card for a cutting-edge consumer electronics shop is a safe bet. A gift card is still personal and shows thoughtfulness and insight.
Cash gifts are always an option, but can seem like an insult. A stack of bills in an envelope or a digital bank transfer risks sending the signal that you couldn’t be bothered to choose anything but the dollar amount. Gift givers often want receivers to treat themselves, and that’s easier to achieve with gift cards than cash, which might be used to pay bills or buy mundane necessities. Gift cards sit in that comfortable midpoint between cash and that elusive perfect item. Choosing the right store or that special brand takes time, effort and discernment and shows you care.
Why Businesses Love Gift Cards
Businesses try all kinds of strategies to get new customers to visit their online stores and pay a visit to their brick-and-mortar shops. But when shoppers have gift cards, they come all on their own. Since it’s already paid for, they’re ready for that deep dive and eager to explore. Gift card customers feel like they’re getting something free. There’s less pressure. They’re not buying, they’re choosing. Not only that, but studies show that customers with gift cards often spend more than the value of the card.
For businesses, gift card purchases are like direct, interest-free loans from customers that take the form of valued customer referrals. By earning cash now and redeeming cards later, retailers save money at the same time that they’re putting their marketing plan into action. If cards aren’t redeemed, it’s an inadvertent windfall.
Most importantly, gift cards help businesses grow their customer base and take advantage of seasonal and holiday shopping patterns. Focusing on gift card marketing is a great way for businesses to leverage customer recommendations, introduce more customers to the brand and increase consumer spending in the months and years ahead.