As the UK high street prepares to reopen, new research suggests that gift cards could be the key to encouraging anxious shoppers back to stores and boost sales.
The ‘State of the Nation 2021’ research, carried out by the Gift Card and Voucher Association (GCVA), found that almost two-thirds (65 percent) of shoppers have been introduced to a new brand or organisation after receiving a gift card for that business, up from 59 percent in 2019.
This increase GCVA states indicates gift cards’ growing status as an integral customer engagement and loyalty tool and could hold the key to attracting anxious shoppers back into stores next week, as well as increasing brand exposure and expanding their customer base.
The survey to determine evolving buying habits and attitudes towards gift cards asked 2,000 UK shoppers and found that 43 percent of shoppers have made a one-off purchase from a business after receiving a gift card, and a further 22 percent had become a regular customer.
In addition, the research suggests that gift cards can also be used to captivate the next generation of shoppers, as Millennials and Generation Z are the most likely to be swayed towards a new brand after being introduced via a gift card, with one in three millennials (33.3 percent) and 27 percent of Generation Z.
Gail Cohen, director-general of the GCVA, said in a statement: “Between their convenience, ease of use and versatility, gift cards have gone from strength to strength over the past year. Shoppers love gift cards, whether buying or receiving them, and it is clear that retailers and other high street businesses cannot afford to ignore their importance and continuing relevance to consumers, which is only growing over time.
“Throughout the pandemic gift cards have been, and continue to be, an invaluable customer loyalty and engagement tool. With their ever-growing popularity amongst retailers, businesses and the public alike, gift cards remain vital for high street businesses as they emerge from this challenging period.”
Two-thirds of shoppers become new customers of a brand after receiving a gift card
The pandemic has also highlighted digital gifting solutions in the wake of enforced social distancing restrictions as gift card use continues to shift to digital channels. Nearly a third (31.4 percent) of shoppers now more frequently purchase gift cards via online channels since the onset of the pandemic, and 29.5 percent report the same on mobile devices, indicating how shoppers, and gifting generally, continue to adapt to the changing face of retail.
Echoing the ongoing shift in buying habits more widely, 38.4 percent of respondents also added that they have now converted to digital gift cards, while 47.1 percent said that it is now normal to redeem their gift card, whether digital or physical, online, which is up from 43.9 percent in 2019.
The GCVA also added that the data indicates that gift cards drive increased in-store spend, which is promising news for when stores reopen, as more than two-thirds (67.8 percent) of shoppers reported that they usually spend a higher amount than the straight value of their gift cards when redeeming them.
The research states that 96.2 percent of those respondents spend up to an extra 50 pounds when redeeming their gift cards, which presents a major revenue opportunity for retailers to generate spend beyond the initial gift card sale over the coming months.
Another key trend is that shoppers are buying gift cards for self-use, adds GCVA. Almost a third of gift card purchasers (31.8 percent) said that they purchased for their own use over the past three years due to, among other reasons, being a secure payment option for purchases.
This rise is more prominent amongst younger shoppers, with 42 percent of millennial shoppers and 34 percent of Generation Z, likely to purchase a gift card for themselves. One of the reasons stated was a desire to support a local business, cited by 25.2 percent of millennial shoppers.
Cohen added: “Brands would do well to pay attention to shoppers’ evolving tastes when it comes to gift cards, such as the rise of digital solutions and self-use, and tailor their offering accordingly, such as by offering in-store promotions and incentives for gift card self-use.
“Those that stay mindful of these changing consumer trends and expectations will be able to take full advantage of the numerous benefits gift cards offer, placing themselves in excellent stead to thrive over the coming months as gift cards continue to grow in popularity and importance.”
Image: courtesy of Gift Card and Voucher Association (GCVA)