As UK high streets prepare to reopen, new research reveals gift cards could be the key to boosting sales and attracting shoppers back to stores. The State of the Nation 2021 research, which surveyed 2,000 UK shoppers to determine evolving buying habits and attitudes towards gift cards, found almost two-thirds (65%) of shoppers have been introduced to a new brand or organisation after receiving a gift card for that business. This is up from 59% in 2019, indicating gift cards’ growing status as a customer engagement and loyalty tool.
The research, carried out by the Gift Card & Voucher Association (GCVA), shows 43% of shoppers have made a one-off purchase from a business after receiving a gift card. Plus, a further 22% have become a regular customer. Furthermore, younger shoppers were the most likely to become a regular customer of a new brand after receiving a gift card for that business.
One in three millennials (33.3%) and 27.0% of Generation Z reported this; signifying gift cards to be a particularly efficient method of new customer acquisition amongst younger shoppers.
Promisingly, the findings also indicate that gift cards drive increased in-store spend. More than two-thirds of shoppers reported that they usually spend a higher amount than the straight value when redeeming them. Meanwhile, 96.2% of those respondents spend up to an extra £50. This presents a major revenue opportunity for retailers to generate spend beyond the initial gift card sale.
Unsurprisingly, digital gifting solutions continue to rise in importance in the wake of enforced social distancing restrictions; 31.4% of shoppers have purchased gift cards more frequently via online channels since the onset of the pandemic, with 29.5% reporting the same on mobile devices.
Echoing the ongoing shift in buying habits, 38.4% of respondents say they have now converted to digital gift cards. Plus, 47.1% of respondents now normally redeem their gift card (whether digital or physical) online. This is up from 43.9% in 2019.
Retailers should also be mindful of the rise of gift card self-use. Almost a third of gift card purchasers have purchased one for themselves over the past three years. This rise is once again more prominent amongst younger shoppers; 42% of millennial shoppers and 34% of Generation Z are likely to purchase one for themselves. This is due to reasons including a desire to support local businesses – specifically cited by 25.2% of millennial shoppers.
Commenting is Gail Cohen, director general of the GCVA.
“Gift cards have demonstrated that they have been, and continue to be, an invaluable customer loyalty and engagement tool that will be vital for high street businesses as they emerge from this challenging period.
“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. 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.
“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.”
For further information on the GCVA, please click here.
