The biggest change in the gift card industry wasn’t plastic vs paper or even plastic vs digital gift cards – it’s the rise of self‑use as people buy gift cards for themselves making gift cards a payment mechanism.
Independent research commissioned by Zeek Mobile, Europe’s leading retail currency platform, has revealed that nearly half of UK shoppers (47 percent) are purchasing gift cards to spend on themselves. The study, the first of its kind in the UK, surveyed over 2,000 UK consumers and found that the top three drivers for self-purchase are convenience (37 percent), to receive a discount (36 percent) and to help budget shopping (24 percent).
“The UK gift card market is estimated to be worth around £6bn 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, Zeek Mobile. “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.”
Which UK shoppers are buying gift cards for self-use?
- Millennials (16-34 yr olds) are most likely (3 in 5) to purchase gift cards for self-use with a further 15 percent saying they do this often. Again convenience, receiving a discount and budgeting their shopping were the top 3 reasons for self-purchase.
- Men are more likely than women to purchase a gift card for convenience and to receive a discount (both 41 percent for men versus 34 percent and 33 percent respectively for women). Women are more likely to do this to help them budget their shopping (26 percent compared to 22 percent of men).
- When it comes to encouraging self-purchase, receiving a discount tops the list of things that would prompt Brits who haven’t bought themselves a gift card before to do so (34 percent).
Who is benefiting from this trend?
- Both online and offline retail are gaining from the self-use trend. Whilst shoppers are more commonly using them for online purchasing (66 percent), nearly half of respondents (48 percent) have used them to shop in-store where the average order value is 17 percent higher than it is online.
- Gift cards bought for self-use are helping to drive loyalty – with almost 3 in 5 (57 percent) of self-purchasers saying they visit a particular store or restaurant more often because of their gift card – and 24 percent agreeing that they do this ‘much more’ often. At 71 percent, Millennials are again leading this trend.
- Over three-quarters of self-purchasers are overspending on their gift card providing retailers with additional revenue. On average they overspend by £28.35 per transaction. Millennials are overspending by the most, averaging an overspend of £33.34.
- Gift cards are assisting retailers with customer acquisition – over 7 in 10 UK shoppers agree that a gift card would encourage them to shop at a store they wouldn’t normally visit – additionally, nearly a quarter of Millennials say that it would ‘definitely’ encourage them.
- Fashion is the most popular sector for self-use at 28 percent. However, supermarkets follow closely behind with 25 percent. Electronics came in at 23 percent and entertainment at 22 percent.
The next step for savvy retailers is to use this knowledge to make rewards for this behaviour. Whether that’s points, cashback or loyalty bonus – now is the time to make your gift card programme something that not only increases revenue but a tool that sits within your marketing function.