We have all become accustomed to staying at home over the past year, and as a result, many of us have switched to shopping online. With this, online gift card sales are expected to soar over the festive period. Evie Rusman writes

Recent research from Blackhawk Network shows that not only are consumers shopping earlier but they are also buying more gift cards and leaning on digital gifting this holiday season. The company’s 2020 BrandedPay Holiday Shopping Preview report projects that holiday gift card spend will increase 19% over 2019.

In addition, the research shows that more than half of consumers (52%) report that they are more likely to buy more gift cards this holiday season than in previous years. Respondents also expect to purchase 10 gift cards on average – double what they reported last year. Why such a rise?

Speaking to CI, Theresa McEndree, vice president of marketing at Blackhawk Network, says: “We have seen across the board that consumers are moving online for purchasing and just using physical retail for essentials. However, a lot of everyday purchasing has also moved online, and gift cards are no different.

“We have seen a really exciting increase in both people purchasing gift cards online as well as purchasing digital gift cards. This demonstrates the shift to e-commerce and the shift to a digital form factor. Physical has always been a dominant medium but this year we have seen great adoption in digital gifting and acceptance. People are excited about gift cards and digging into the personalisation and immediacy that those products can provide.”

Merchants changing their ways

Not only has Covid-19 changed the way consumers shop but it has also changed how merchants choose to operate. In order to cope with surging holiday sales this year, according to McEndree, merchants began preparing mid-October.

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This comes as there is an increasing demand for digital gifting – according to the Blackhawk Network research, 49% of respondents plan to do more of their holiday shopping online.

“The majority of brands and retailers have just done a fantastic job at changing their business models and changing how customer engagement works,” she says. “We’ve also seen gift cards show up in really great places, whether it is rewarding people for curb-side pickup or offering gift cards for subscriptions and streaming services.

“Everybody has gotten into the content game and new channels for delivery and service. That is where brands are evolving, and it has been really great to see how gift cards are either helping drive that adoption or supporting payments within that ecosystem. Gift cards can also be used for contactless payments and we are seeing a lot of people move to that – a really exciting trend.”

McEndree also discusses how merchants have moved away from concepts such as Black Friday and Cyber Monday in response to consumer trends.

Gift card trends

Over the past few years, gift cards have become more and more advanced – no longer are they just a singular tool to spend physically but they now have a whole host of different uses. McEndree tells CI, how companies are using gift cards in innovative ways.

“A couple of trends that we are seeing are continued growth in digital both in purchasing and delivery, and we are also seeing companies use gift cards as the backbones to their payments ecosystems,” she says. “It is stored value – it can be delivered in a barcode or QR code. We see a lot of companies like Starbucks that are using their gift card to power an ecosystem.

“We have also seen gift cards move into the non-profit and charity sector really meaningfully – as a way for individuals to help support their communities by giving out gift cards. Adding to this, we have seen the large charities, governments and non-profits use gift cards to distribute relief. The latter is especially essential during Covid times when companies do not want a large queue of people lining up for goods to donate.”

McEndree continues: “From a consumer perspective, there has been huge growth in what we call self-use. This is where people use gift cards to access digital ecosystems. This works particularly well for gaming – many parents and individuals are using gift cards as a way to access gaming ecosystems and manage budgets.”