In the present scenario, changing customer purchasing patterns have significantly fuelled the growth of the gift card market. According to the National Retail Federation, in 2017, total holiday spending increased by 4.3 - 4.8 percent, for a total of US$ 717 billion - US$ 721 billion. This trend has significantly helped market players boost their sales in terms of value.
Moreover, there has been increasing usage of gift cards in the corporate sector to recognize the contributions and achievements of employees. In addition, there is high adoption of e-Commerce and m-Commerce in developed and developing countries, owing to high penetration of smartphones and increasing Internet connectivity.
Nowadays, consumers prefer to buy gift cards, either physical or digital, from merchants across multiple channels (in-store, online, mobile websites and apps). Hence, the adoption of the omni-channel concept is significantly helping companies witness prominent growth in the gift card market.
In 2019, InComm Company, in partnership with Razer Inc., launched Google Play gift cards in Malaysia, making the product available at nearly 2,250 7-Eleven stores across Malaysia.
In 2019, CashStar, Inc. launched the Interactive Gift Card Platform, which is expected to register new growth opportunities for market players. Companies such as Uno Chicago Grill, Travelocity Incentives, and Gorham Bike & Ski are principally engaged in offering interactive gift cards via the CashStar platform
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Company Profiles - Open loop
- Blackhawk Network Holdings, Inc.
- Edge Loyalty Systems Pty Ltd.
- National Gift Card Corp.
- QwikCilver Solutions
Company Profiles - Closed loop
- Apple Inc.
- Amazon.com Inc.
- Best Buy Co., Inc.
- Starbucks Corporation
- Target Corporation
- Wal-mart Stores, Inc.
Usage of Gift Cards as Promotional Tool Remains Mainstay of Key Players
The key strategy of players in the gift card market includes usage of gift cards as promotional tools for their companies. Moreover, they are engaged in partnerships with other companies to give offers on their products by means of gift cards. This strategy has helped companies increase their sales in terms of volume.
Demand for gift cards from the corporate sector has been witnessing a significant rise, globally. Companies are showing encouragement to employees in the form of gift cards to recognize their contributions and achievements. Gift cards are convenient and safe, and have proven to be a novel means of recognizing employees and reward them for their good performances.
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?Partial Redemption Feature Motivating Consumers to Opt for Gift Cards
Consumers participate in loyalty programs in order to earn gift cards as rewards. They can later spend the prepaid value of these cards on purchases. Gift cards sometimes act as a budgeting tool for consumers, as they decide only to make purchases equivalent to the amount available on the card, and not pay anything extra out of their pockets.
This is a primary factor encouraging consumers to opt for gift cards. Furthermore, some outlets also offer deals on gift cards for their regular customers. On the purchase of a gift card, a bonus gift card of lesser amount is offered, and this can act as a mode of driving customer satisfaction.
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Changing Lifestyle and Continuous Surge for e-Purchasing
Increasing adoption of the cash-to-card concept is positively influencing the demand for gift cards. This form of alteration in the lifestyle of individuals is inspiring them to purchase gift cards, and has significantly boosted the growth of the gift card market in terms of value.
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Self-use Purchase a Key Trend among Customers
According to Blackhawk Company, 51 percent of consumers purchase gift cards for themselves to shop online, as they can receive a discount or take advantage of a promotion, collect credit card points, earn airline miles, and for budgeting purposes. This high level of self-use is expected to cause brands to re-examine their e-Commerce gift card purchase experiences.
Omni-channel Capabilities to Provide Growth Opportunities for Market Players
Most of the key players in the gift card market are principally engaged in offering gift cards through their own online sales channels, physical stores, and third party e-Commerce parties. Selling gift cards through physical stores as well as online channels help companies target customers across the globe. Thus, the omni-channel concept is expected to help companies witness significant growth, in terms of value, during the forecast period.
Gift Card Market: Competition and Regional Overview
The global gift card market represents a fairly consolidated competition landscape, where, a majority of key players maintain their strategic focus on launching new and innovative gift cards.
- In 2019, National Gift Card (NGC) acquired Benefit Mobil (Digital payments and fundraising company) to enhance its digital services and gift card technology.
- In 2019, Tango Card acquired GiftCertificates.com, which helped the company increase approximately 1,000 customers.
- In 2019, InComm (Payments Technology Company) acquired Linq3 Technologies to penetrate the lottery industry by providing gift cards.
- In 2017, Blackhawk Network expanded its partnership with eBay to provide the online marketplace with end-to-end and business-to-business (B2B) gift card services. This partnership helped the company increase products availability to customers across the world.
- In 2016, Blackhawk Network, (prepaid and payments network) acquired GiftCards.com, LLC and OmniCard, LLC to increase its number of customers and expand its e-Commerce business across the world.
Global sales of the gift card market reached US$ 378 Bn in 2019. According to PMR’s report, the gift card market is estimated to register a CAGR of 13% during the forecast period of 2020-2030.
North America held the largest market share in 2019, followed by East Asia, owing to the high number of retailers and hotel chains in the region. In developing regions and countries, companies are slowly adopting new technologies such as hybrid and dual interface cards. These types of cards provide several benefits to commuters, such as reduction in travelling time and improvements in service efficiency.
These cards help enhance security, reduce fraud, and enable the utilization of value-added services for end-user industries such as banking, telecommunications, healthcare, and others. Asia Pacific is the most lucrative market for Gift Card, due to the presence and usage of more gift cards in the region. China is the largest market for gift cards in the region, followed by India, which holds the second-largest market share in the Asia Pacific region.
A brief overview of the changing landscape of the gift card market has led our analysts to conclude that, the gift card market is growing faster in developing regions. Moreover, hotel gift cards are significantly registering growth opportunities across the world. Key players in the gift card market can increase their sales by introducing new and innovative gift cards and providing excellent consumer services. At present, the market has been adversely affected by the Covid-19 pandemic, as e-Commerce activities have picked pace and most physical stores are shut. However, recovery should be witnessed during the 3rd and 4th quarter of 2020.
Gift Card Market: Segmentation
PMR’s research study on the global gift card market offers a detailed market analysis, wherein, key segments have been discussed in detail. The segmentation of the gift card market has been offered on the basis of type, and merchant. Every segments have been analyzed in detail, and data pertaining to the growth of each segment has been included in the study.
The gift card market research report includes a competitive landscape that provides a dashboard view of key competitors operating in the gift card market. Some of the market players profiled in this section include Amazon.com Inc., Apple Inc., Best Buy Co., Inc., Blackhawk Network Holdings, Inc., Edge Loyalty Systems Pty Ltd., Gyft, InComm, National Gift Card Corp., QwikCilver Solutions, Starbucks Corporation, Target Corporation, and Wal-mart Stores, Inc.
Gift Card Market: Key Questions Answered
The research study offers inclusive insights about the growth of the gift card market in the most comprehensible manner for the better understanding of readers. Key insights offered in this report answer some of the salient questions that assist stakeholders in gauging all emerging possibilities.
- How do rapidly changing consumer perspectives act as major growth engines for the gift card market?
- How does e-Commerce boost the growth of the gift card market?
- What are the key trends that are constantly shaping the gift card market?
- Which are the prominent regions offering plentiful opportunities for the market?
- What are the differential strategies adopted by key players to command a significant chunk of the global market share?