Isn’t it wonderful news that our growing global industry will be worth $4.2 TRILLION by 2032.
At the end of 2022, research revealed that the European market alone was valued at $155 billion, and data analysts are expecting the market to record a CAGR of 12.4% to hit over $558 billion by 2033.
This kind of growth requires rapid advancement of new technologies and new products, which creates opportunities for innovative partnerships and healthy competition. At The Gift Club, we’re proud to facilitate the development of our gift card, incentive, and loyalty partners.
In this article, we’re going to take a look at some of the big headlines from 2023, how we reacted as an industry, and how these issues may continue to impact us in 2024 and beyond.
We’ll be celebrating this fine industry once again at our next in-person conference in May. The BIG Handshake: Gift Cards & Incentives will take place in Amsterdam, where we’ll be unpicking the latest challenges together, forging new connections, and strengthening existing relationships. On Day Two, we’ll open with a state-of-the-nation update on the some of the topics covered in this blog.
How did the key events and social issues of 2023 impact on the European market?
Industry growth and success is not without its struggles. Big world issues are affecting numerous industries, and ours is no different. There’s merit in the way that we’re meeting these challenges, though, and we’ll no doubt overcome (or at least outlast) most of them as a collective.
Let’s take a brief look back at the trends that emerged in 2023.
A challenging employee engagement landscape
The lasting impact of COVID drastically accelerated the employment landscape beyond any reasonable pre-pandemic expectations. As the world restabilised, it’s no surprise that the recruitment market reignited with gusto. 2022-23 seemed to be the year that employees finally left roles they’d outgrown and that businesses were able to recommence plans for expansion.
These developments have created a turbulent job market. With demand for new hires often outweighing application numbers in many sectors, the ball landed firmly in the candidate’s court for the first time in many years.
For businesses, this meant that investment in great employee engagement had never been more important, and this fact remains very much valid for 2024. Given that 73% of employees are considering switching jobs this year, a solid benefits package, meaningful recognition and rewards, and a crafted culture with flexibility are serious requirements that potential applicants are expecting to see on every job offer.
AI – the new age of engagement
Although the concept of AI is not inherently new, the launch of OpenAI’s ChatGPT in early 2023 led to a small phenomenon where businesses implemented Generative AI functions into their customer facing services.
Since then, a whole raft of AI technologies have come to market and although there’s still much to learn about how we can use this to its full capability within gift card and incentive programmes, we’ve already seen integrations improving dynamic personalisation, automation, and data analysis.
The integration of eSIMs and calling credit
The rollout of eSIM on new devices has quickly been acquired by the gift card industry as a new channel of sales distribution. Data eSIM deals and short-term, prepaid mobile calling plans first appeared in vendor catalogues around March 2023. The capability to host multiple digital SIMs on one device and switch plans at the tap of a button means that consumers need no longer stay loyal to one network provider.
Particularly useful for travelling in foreign countries, eSIM allows the user to take advantage of temporary (or permanent) data bundles served via the local networks. Thus eliminating the issue of roaming charges.
This new channel has allowed network providers access to a whole raft of new partnership opportunities with players in our industry. In 2024, we expect to see new propositions advance further into the gifting and loyalty space.
Popularity at peak – the gift card is still on top!
Unsurprisingly, research shows that gift cards as Christmas/Holiday gifts remain incredibly popular. A report by Blackhawk Network reveals that shoppers in 2023 planned to spend over a third of their budget on both physical and digital gift cards.
Contributing factors to maintaining this level of popularity include:
- Multi-brand cards providing the recipient with their choice of redemption partner
- Open-loop prepaid cards allowing flexibility of spend anywhere that payment networks (e.g., Mastercard or VISA) are accepted
- Global gift cards – i.e., cross border acceptance – lifting limitations on gifter vs giftee location
- Crypto – more outlets are accepting crypto as a valid currency
Which trends and events will impact the gift card and incentive market in 2024?
International warfare and numerous political agendas threaten the equilibrium in 2024, yet still the gift card and incentive industry strives to rise above. The businesses we’re speaking to on a daily basis are actively working towards multiple social causes, developing new technologies, and launching new products to resolve consumer pain points.
The cost of living
An unprecedented hike in inflation as a result of the pandemic and supply chain disruption created an ongoing, widespread cost-of-living crisis. More than a year on from this and retailers are still reporting decreased overall spend and changes in behaviours towards brand products and services that had previously stood the test of time.
‘Heat vs eat’ conversations on the international news prompted many businesses and brands to utilise gift card and incentive suppliers to support a number of initiatives that have been instrumental in helping vulnerable families stay afloat.
- A continuation in supporting fund disbursement via council contracts
- Deeper savings and discounts on brands and products available within employee engagement programmes
- Cards and codes that can be redeemed against specific brands, including grocery stores and energy providers
- Activities undertaken and functionality built to proactively encourage money mindfulness – including a whole new social media network!
- Card and account linking to cashback and discount offers
- Prepaid, reloadable cards as employee reward tools
- Charity shop gift cards providing opportunities to buy pre-loved items
- Loyalty programme member-specific discounts on commonly purchased goods
- Incentive and reward programmes that include charitable giving functions
Interestingly, according to research by Incomm, there has been a marked increase in buying gift cards for self-use, with the most commonly cited reason as ‘money management’.
Bridging the gift card gap
A growing trend that will see real traction in 2024 is how the industry is beginning to bridge the gap between gift cards and loyalty. This one is all about understanding how to utilise gift cards in your efforts to incentivise and reward increased engagement and spend within a closed membership group.
Great examples include SELP Digital’s new CLING Loyalty solution – a consumer-facing platform where brands can directly issue gift cards to individuals or groups to inspire repeat purchase or upsell.
Planet-friendly, sustainable initiatives
A hot topic across many industries as consumers demand greener approaches to business. The gift card and incentive industry has taken its first steps towards sustainability with investment in both physical and digital innovations:
- Reverting to paper or plant-based substrates for single use physical cards
- Encouraging an uplift in digital gifting by implementing personalisation functionalities and online redemption mechanisms
- Building apps for easy access to gifting and redemption
- Reward programmes with triggers related to sustainable behaviours
- Off-setting carbon emissions by establishing partnerships with conservation bodies such as The National Trust and Ecologi
- New gift cards and platforms on the market that partner with sustainable brands and promote re-use and recycling schemes; The Charity Shop Gift Card, EcoSwap, and Allcolibri
In 2024 and beyond, there will undoubtedly be an influx in spend and development in this area as data shows that 66% of shoppers now consider sustainability before making a purchase.
Developing demographics – the new purchasing power
In recent years, the industry has turned its attention to the growing demographic of Gen Z. The youngest of this cohort will turn 12 in 2024, which means that the entire generation is now considered old enough to control (at least an element of) its own purchasing power.
A savvy, planet-conscious bunch who are risk averse and prefer a slower, drama-free life, these are the first ‘digital natives’, who use their mobiles for just about everything – including banking, gifting, and loyalty.
To date, there has been a lot of analysis of this age group to look at how, why, and when they might purchase something, and the loyalty-based trends they may follow. But in 2024 we suggest the industry begins to consider the follow up generation – Gen Alpha – and the ways in which engagement may differ again as they mature into purchasing power territory within the next two years.
As digital users from an early age, prepaid pocket money solutions such as GoHenry are rising in popularity. These purchases, even at younger ages can indicate future trends that should be under analysis sooner rather than later.
Join us at The BIG Handshake: Gift Cards & Incentives
We’re heading back to Amsterdam to host our next in-person event on the 14th and 15th May. Focused on building partnerships across the industry, we’re expecting to see over 150 attendees from a broad spectrum of brands, retailers, vendors, suppliers, distributors, and resellers.
Across one and a half days, we’ll be diving into seven educational sessions where 18 experts who have really been there and got the proverbial t-shirt will share their learnings and advice. These panel discussions and keynote presentations will include insights and actionable take aways from topics touching on the positioning, marketing, and sales elements of B2B and B2C gift cards and incentives.
And of course, no industry event is complete without its fair share of networking. Attendees at The BIG Handshake will benefit from more than four hours of structured networking time using our signature colour-coding system.
To view the full agenda and book your ticket, visit The BIG Handshake website.
