While most top retailers have gift cards available there is still a huge opportunity for brands to capitalise on the gift card market.
That’s according to research from NAPCO, in conjunction with Blackhawk Network, which evaluated the state of key merchants’ gift card offerings, including TKMaxx, H&M and Apple.
The report highlights how retailers can reap the benefits of this growing market – Of course, Amazon topped the list, cementing itself as king of yet another sector, but even the retail giant has some room for improvement.
Essentially, the report found that across the board, top retailers are missing out on significant revenue streams by not giving customers what they want when it comes to gift cards. Even the most basic innovations seen across other areas of retail are yet to be implemented for gift cards. Key areas for improvement cited include:
Better personalisation: consumers have come to expect high levels of personalisation throughout the customer journey yet no retailer is capitalising on this when it comes to gift cards
Gift cards are often associated with consumer gifting but there is huge growth predicted in the B2B market. Tesco is leading the way in this category, scoring 100%, but other retailers are falling behind
There has to be better synergy between on and offline. The gift card space is lacking considerably when it comes to digital, with many retailers not offering the chance to purchase online or in-app.
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, the report says, 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.
Tesco, which earned 100 percent in the B2B category, has a dedicated corporate gift card site that allows users to customise the number and denomination of gift cards which puts it in a strong position.
Looking at the bigger picture, the report says 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.