Consumer Interest Grows in Digital Gift Card Programs
PLEASANTON, Calif. — Consumer interest in digital gift cards shows no signs of slowing, suggesting merchants should continue their investments in those programs, according to a new report from Blackhawk Network (BHN) and NAPCO Research.
The seventh annual "Benchmark Report: Digital Gift Card Leaders" evaluated the digital gift card programs of 100 top U.S. merchants across 15 verticals, assessing the complete experience based on 135 unique criteria. Analysts evaluated the buyer and recipient experience, purchasing physical and/or digital gift cards from each retailer.
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"The U.S. gift card market is forecasted to reach a total value of more than $247 billion by 2027 with digital gift cards and codes forecasted to account for nearly 55% of total gift card spending. Consumers continue to seek out gift cards at a growing rate, but to fully maximize the [return on investment] of a gift card program, merchants need to invest in both in-store and digital," said Jay Jaffin, BHN chief marketing officer.
Key findings and takeaways from the 2024 evaluation included:
- Gift card programs can represent significant sources of untapped revenue and can benefit from increasing program awareness and optimizing customer experience to help nurture revenue growth.
- Some retail verticals are ahead of the pack in program execution, with health and beauty at the head of the pack, followed by general merchandise and sporting goods.
- Traditional online shopping channels remain relevant, with desktop use continuing to be the highest scoring channel across verticals.
- A mobile-first strategy can improve gift card programs by creating innovative approaches to selling and redeeming gift cards across all customer touchpoints.
The report also included a customer loyalty synopsis and introduced segmented scoring for the first time, which includes brand-only gift card programs as well as gift card mall programs
The full U.S. edition of the "Benchmark Report: 2024 Digital Gift Card Leaders" can be found here.
Blackhawk Network is a global branded payment technologies provider with a portfolio that includes gift card and digital code products; promotions and distribution; rewards and incentives; and payments.
NAPCO Media is the parent company of Total Retail, a digital retail publication, as well as 15 other brands. NAPCO Research partners with retail clients on their custom research and thought leadership needs.