Gift cards are an often purchased present. They are flexible and can be given to anyone, no matter the personal relationship. However, consumers have started to purchase them for themselves. Patrick Brusnahan reports
The UK gift card market isn’t the first one thinks of as large, but it is.
According to the UK Gift Card and Voucher Association (UKGCVA), gift cards grew 6.6% year-on-year in 2017. In addition, it grew 8.5% in the second half of the year alone.
Moreover, 73.2% of UK consumers have purchased a gift card in the past three years. 98.5% of consumers redeem gift cards within 12 months, so they are utilised.
The UKGCVA describes millennials as the “self-gifting generation” and this is set to provide an additional revenue stream to retailers and other businesses.
According to retail currency platform Zeek Mobile (Zeek), close to half (47%) of UK shoppers are purchasing gift cards to spend on themselves.
Over 2,000 UK consumers were surveyed and three top drivers were identified. Those were convenience (37%), to receive a discount (36%), and to help budget shopping (24%).
“The UK gift card market is estimated to be worth around £6bn ($7.89bn) and is usually associated with gifting, however, savvy shoppers are finding new, creative ways to use gift cards to fit their lifestyles,” said Daniel Zelkind, CEO of Zeek.
“Millennials in particular, who traditional retailers have typically struggled to reach, are adopting gift cards because they offer benefits they can’t get elsewhere. This is an important trend. These young, tech-savvy, budget conscious shoppers make up a quarter of the UK population and are leading the way for the next generation of shoppers.”
Treating yourself with a gift card
Millennials are seen to be the most likely to self-gift. Defined as 16-34 year olds by Zeek, three in five of them would purchase gift cards for self-use and another 15% said they did this regularly.
Men were more likely than women to purchase a gift card for convenience and to receive a discount (both at 41% for men versus 34% and 33% respectively for women).
However, 26% of women are likely to do this to help them budget shopping. This is four percentage points higher than men.
Zelkind adds: “The popularity of online retail has been driven by expediency and pricing, so it’s no surprise to see convenience, discounts and budgets motivating self-purchase here. It’s all part of the smart consumerism trend, where people are willing to pay in advance to save time and money.”
Whilst shoppers are more commonly using self-use gift cards for online shopping (66%), nearly half (48%) have used them in-store. In-store purchases also tend to be 17% higher than online, according to Zeek (£87 in-store versus £74 online).
Close to three in five (57%) of users visit a particular store or restaurant more often because of their gift card. 24% believed they did it “much more” often. Again, millennials lead the way with this trend at 71%.
“It’s time to rethink what gift cards are and what they can do for the retail sector. As consumer self-use use cases continue to increase, they offer a win-win for shopper and retailer alike. We are seeing a similar trend on our own platform. Over 90% of our customers purchase gift cards for self-use, which has led us to reimagine them as Retail Currency,” concludes Zelkind.