Demand for Digital Gifting Reaches All-Time High: New Report Reveals Best Practices, Progress and Areas for Growth in Gift Card eCommerce Programs
PLEASANTON, Calif., May 6, 2020 /PRNewswire/ -- As consumers are pushed to shop online, findings from a new study1 by NAPCO Research, a leading independent retail research firm, examine the progress and areas for growth in digital gifting programs. Based on Blackhawk's sales data, first party sales (e.g., gift cards sold directly from a restaurant and merchant's own website) on its partners' channels since mid-March are up 92% over 2019.2. NAPCO's third annual Merchant Gift Card E-Commerce Evaluation offers merchants the opportunity to compare results to previous years to get accurate insights into the performance of their programs, see the progress in ecommerce sales channels and identify areas for potential growth.
"We've seen unprecedented growth in digital gifting in 2020 and believe consumers' rapid adoption of digital gift cards is here to stay. The gift card market is forecasted3 to reach nearly $550 billion by 2024 and now 71% of consumers that were surveyed report they are interested in digital gift cards vs. other gifts," said Theresa McEndree, vice president of marketing at Blackhawk Network. "With this steady increase in interest from consumers to purchase gift cards, retailers need to continue their focus on creating the best online experience possible for consumers. We're seeing that the brands doing digital well across the board are placing an emphasis on omnichannel, considering the digital customer experience for all shoppers and using gift cards as promotional tools and for B2B programs. The good news for retailers is that while there is still a lot of room for overall improvement, there is significant money being left on the table, especially when we're looking at the online gift card purchase and recipient experience."
The cross-platform assessment evaluated 150 brands across 109 unique criteria and revealed that the gap between ecommerce leaders and laggards is narrowing. This indicates that more merchants are realizing the value a strong gift card program can bring to their organization and are taking the steps to act on it. Other key highlights from the evaluation, include:
Home furnishings overtake department stores as top performing digital gifting programs
Home furnishing merchant programs have overtaken department store digital gifting programs as the top-performing category this year with the highest average score (53%). Department stores (51%) fell to second this year after leading all product categories in the 2018 report. Rounding out the top three were sporting goods brands (50%). In looking at the categories in need of the most improvement, gaming (18%), grocery/pharmacy (25%) and hotel (28%) programs had the lowest average scores.
Biggest Overall YOY improvements
There were several positives that emerged from the report, including improved overall year-over-year performances in discoverability, self-use and fraud protection.
- Discoverability: The average score for discoverability—or the ability for buyers to find gift cards—was 57%, up from 55% in 2018. Improved performance in discoverability on merchants' websites, both desktop and mobile, is helping to compensate for their struggles in mobile apps.
- Self-use: Thirty-one percent of merchants provide an expedited experience for consumers to buy gift cards for self-use, up from 25% in 2018.
- Fraud protection: Twenty-seven percent of the merchants evaluated declined at least one legitimate card purchase transaction (a false positive). This is a drop from 44% in 2018, but it's still a problem that brands must address.
Overall Gift Card Program Trends
Several key gift card program themes emerged from this year's evaluation. Some of the highlights from the report include:
- Desktop experience remains the best: For the third consecutive year, the average score earned for merchants' desktop experience topped that of both mobile channels—mobile web and mobile app. Merchants earned an average score of 49% for their desktop websites, compared to 42% for mobile web and 29% for mobile apps.
- More payment options equal more gift card sales: Merchants are missing opportunities to increase gift card sales because of limited payment options. The average number of payment options for the merchants evaluated was 5.76. More than 20% offered no other payment options beyond the standard four major credit cards. With more consumers shopping on their phones, offering multiple payment options that speed up and simplify the checkout process can result in increased gift card sales, especially for those more likely to abandon their carts at checkout if they're forced to fill out a long form with payment details.
- Digital natives are playing catch up: Digital-native and direct-to-consumer brands may be shaking up the traditional brick-and-mortar business, but that disruption surprisingly doesn't extend to online gift card sales. Of the 27 digital-native brands evaluated, they are, on average, trailing their more traditional retail counterparts when it comes to the ecommerce gift card experience, performing below average in each of the three primary channels evaluated—desktop, mobile web and mobile app.
The full report provides merchant scores and rankings in addition to data and insights to help merchants assess the strengths and opportunities for their own gift card programs, and prioritize areas for investment. Criteria were designed to identify expected and emerging capabilities for merchants' digital and physical gift card offerings to consumers through desktop, mobile website and mobile app. The study also evaluated B2B e-commerce offerings and the recipient experience for both digital and physical cards, including redemption options.
Download the full report here.
About Blackhawk Network
Blackhawk Network delivers branded payment solutions through the prepaid products, technologies and network that connect brands and people. We collaborate with our partners to innovate, translating market trends in branded payments to increase reach, loyalty and revenue. Serving 28 countries, we reliably execute security-minded solutions worldwide. Join us as we shape the future of global branded payments. Learn more at blackhawknetwork.com.
About NAPCO Research
NAPCO Media is the parent company of Total Retail, a digital retail publication, as well as 15 other brands. Total Retail publishes daily content and holds webinars and industry events for its 70K+ audience of retailers.
Led by a former Forrester Research analyst, NAPCO Research partners with retail clients on their custom research and thought leadership needs.
1 The 2019 Merchant Gift Card e-Commerce Evaluation is an analysis conducted by NAPCO Research on behalf of Blackhawk Network in 2019. The analysis included 150 top merchants determined by industry rankings and measured against more than 100 criteria.
2 Gift card growth findings are based on 2019 and 2020 sales data from Blackhawk Network.
3 Global Gift Card Market Insights, Forecast to 2025 was published by QYResearch Group on September 24, 2018. The report includes analysis of the global market size of the gift card market in key regions including North America, Europe, Asia Pacific, Central & South America and Middle East & Africa.
MEDIA CONTACT:
Courtney Brunkow
303.717.9575
[email protected]
SOURCE Blackhawk Network
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