As written by Incomm, 9th September 2020
This insight reveals how retailers can engage consumers who may be hesitant to return to brick-and-mortar stores during the COVID-19 pandemic. The findings were recently published by payments technology company InComm in its which compiled survey responses from over 16,000 U.S. gift card shoppers.
Data Reflects Americans Adapting to At-Home Lifestyle
In addition to purchasing gift cards online, consumers have flocked to e-commerce to redeem their gift cards. Online shopping ranked as the most common spending category across both open loop and closed loop gift card users so far in 2020, while gift card spending also increased in the electronics and grocery categories.
Growth in spending on electronics was fueled in part by those working from home and seeking to enhance their at-home entertainment options, such as gaming and streaming digital content. Gift card spend on gaming increased in 2019 and again in 2020, with consumers who purchase gaming gift cards purchasing 70 percent more gift cards per quarter than in the previous year. Additionally, shoppers buying cards for digital streaming services purchased nearly twice as many cards per quarter than the average.
“Retailers have a considerable opportunity to build long-term relationships with gamers and consumers of digital streaming content. These are shoppers making planned, regular purchases of gift cards to pay for services keeping them entertained during the pandemic,” said Parlotto.
Embracing New Brands and Delivery Methods
Gift card shoppers have continued to express a willingness to explore new options. Nearly 79 percent of respondents said they would use a closed loop gift card for a brand they have never tried before. Furthermore, nearly 88 percent of those respondents said they were likely to visit or use that brand again after trying it for the first time.
Along with an openness to trying new brands, the study revealed consumers are embracing new ways of sending and receiving gift cards. Digital gift cards, which the study defines as cards sent and redeemed electronically via email or text message, saw an increase in purchases of 61% through the first half of 2020.
“Brands should pay close attention to this willingness to try new items and services. A gift card delivered digitally through a retail incentive program or promotional offerings could open the door towards successfully acquiring a new customer,” said Parlotto.
