Mrudul
The first Gift card appeared about 20 years ago, and since then the gift card industry has been developing dramatically. But do you know that Gift Certificates gave rise to Gift Cards.
The problem with certificates was that issuing and redeeming them required a lengthy process, and frauds were more common.
So Gift cards came on the market in the middle of the 1990’s as a long-lasting answer to all these issues. Then various well-known companies and brands began to use gift cards.
From the mid-1990’s to 2022, gift cards have witnessed massive growth in popularity. It is becoming more and more common in the USA, available everywhere from big shops to even Pharmacies, from MNCs like Amazon to even small local brands. This industry has grown so much that its current value in 2022 is worth billions, even surpassing the GDP of several countries.
To seize great opportunities for your business we’ve compiled some information to help you understand this booming market and so you can see the situation properly:
1.By 2026, the market for gift cards is expected to grow to $584 billion from its current $534 billion value People might be surprised by how quickly gift cards are being spent, which bodes well for the future of this sector, particularly in the case of digital gift cards. The fastest-growing market, e-gifting, is anticipated to rise by more than 26% by 2025. With this, some even predict that by 2030, the global gift card market would reach $1.4 trillion!
2. When rewards and incentives are given to customers, one-third of them feel motivated to purchase gift cards.33% of respondents ultimately made a purchase at a particular store as a result of an incentive, even if they had no intention of doing so. That’s why many companies uplift their Sales and Loyalty Programs using Gift Cards.
3. 32% of consumers buy seven or more gift cards a year When asked how many gift cards they generally buy each year for occasions like birthdays and weddings, 32% of respondents indicated they typically buy seven or more gift cards.Additionally, the majority of respondents (31%) claimed to purchase seven or more gift cards annually for their personal usage.
4. Despite growing inflation, 51% of consumers do not change their gift card purchasing habits.While inflation has made customers reevaluate their buying habits, 51 % of consumers report that their use of gift cards has not been affected. Those who have seen a change are using their gift cards more wisely when purchasing.Gift cards are being used by 17% of consumers to counteract rising prices. Gift cards are being used by 16% of people to buy necessities rather than wants.
5. Most individuals favor digital gift cards over traditional ones.The popularity of eGift cards has been constant throughout the past few years. Regarding preferred gift card types, 33% of people said they preferred digital cards to physical ones, 29% said they preferred physical cards, and 38% said they had no preference.87 % of consumers claim to have bought an eGift Card in 2018, 2019, or 2020.
6. 32% of customers have either bought a gift card online for the first time or more frequently than before since the pandemic started.Gift Cards make it convenient to make purchases even during COVID-19 because they are simple to use and flexible. Lockdowns were being imposed globally boosting the adoption of e-gift cards, especially among enterprises. In turn, this pandemic has emerged as the main growth driver for the e-gift card business.
7. With a market share of 60%, restaurants, and department stores are the most common places to use gift cards.Restaurant and departmental store gift cards are not necessarily seasonal items, so make good use of various gift-giving opportunities throughout the whole year.
8. More than 35 million US citizens claimed that they would love to receive a gift card over an actual gift.According to respondents, the most enticing aspect of receiving a gift card is the option to treat themselves to something they really desire (77%), followed by the ability to buy goods they genuinely need rather than being given additional “stuff” (66%) and the ability to purchase an item that they otherwise wouldn’t have been able to afford by using the gift card balance (51%).
9. During the holiday season, most consumers on average buy 2 gift cards, closely followed by 3 gift cards.According to research, 65 % of Americans said they planned to buy clothing, 54 % said they expected to buy gift cards, 47 % said they would buy toys, and 42 % said they planned to buy consumer electronics.
10. Customers were asked if they would buy gift cards as part of their online Holiday shopping, and 29.6% said they were “very likely” to do so.There is a group of people that are sure about buying a gift card online for the holidays because they are aware of the numerous advantages a gift card possesses.
Other survey findings included:
Amazon controls about 10% of the global Gift Card industry and is the market leader.
The probability of buying gift cards was highest among millennials (35.7%) and Gen Xers (34.7%).
People are more likely to have bought or received a digital gift card if their salary is higher.
62% of 18- to 34-year-olds said they would like to receive gift cards via social media or messaging applications.
With a projected 30.2 % revenue share in 2022, North America dominates the worldwide gift card industry.
While North America held the majority of the worldwide market share, Asia Pacific is predicted to grow at the quickest rate—19.8%. The region will produce about 6.1 X larger revenue prospects between 2021 and 2030.
What companies dominate the worldwide gift card market?
Amazon.com Inc., iTunes (Apple Inc.), Google Play (Alphabet Inc.), Best Buy Co., Inc., Starbucks Corporation, Target Corporation, Wal-Mart Stores, Inc., and numerous more well-known companies are among the market’s major competitors.
Additionally, the United States, Europe, China, and Japan are home to the majority of the industry’s major players.
Giving gift cards is a popular method. They are more popular with consumers than other gift types, and they can be customized for any occasion. With over 154 million active gift cards in use, the United States is one of the world leaders in the non-cash payment sector. Gift cards are popular for several factors, but their versatility may be the main one.