Marketing

E-gift cards lead card market, big growth ahead

Photo by istock.com

April 29, 2021

When it comes to the gift card market, e-gift cards are the fastest growing segment and retailers need to boost digital capabilities to realize the full value proposition. That's the prime findings of two studies commissioned by GiftNow, a gift experience management provider and Synchrony Solution, and conducted by Incisiv, a research firm.

The findings indicate that a vast majority of retailers still view gift cards as tender, instead of an opportunity to deepen engagement with their customers. Growth in sales of physical gift cards was 9% between 2019 and 2020 and digital gift card adoption is projected to grow 23% within four years — more than two-and-a-half times the rate of growth for overall gift card sales.

"COVID-19 has accelerated the adoption of digital gift cards, as mobile and digital gifting increases and a younger demographic embraces e-gift cards. However, as the gift card market shifts to a digital-first mindset, retailers and restaurant brands must improve their digital gift card capabilities or risk being left behind," the release said.

"Retailers can still derive tremendous value from gift cards, but in an increasingly digital world, it requires new thinking. They must understand how their gift card capabilities need to mature to support this 'new normal,'" Dan Farrell, general manager of gift cards at GiftNow, said in the release. "Gift cards need to be positioned in e-commerce with deeper attributes which are integrated with the search, and recommendations engines that account for things like special occasions. Embracing this type of new thinking in this new normal will deliver significant enhancements to the gift card shopping experience."